The development momentum of small bulk carriers is strong, and the freight rate has exceeded US$30,000 per day. It is understood that due to tight tonnage, charterers are forced to pay rent. The daily rent of handy-sized ships on some routes has even reached US$50,000 per day.
As of July 30, the average weighted time charter rate for Handysize vessels on the Baltic Exchange increased 3.1% to $31,676 per day.
Small bulk carriers continue to gain momentum as tonnage is tight due to strong demand for commodities and fleet inefficiencies. Some shipowners predict that the bull market in the charter market will continue at least until the end of next year.
On July 30, the average weighted time charter price of Supramax on the Baltic Exchange increased slightly to US$32,395 per day, up 5% from the previous week, while Handymax It rose slightly by 3.1% to $31,676 per day.
An operator in Hong Kong said that China has a large freight demand for different small bulk cargoes, which has been supporting freight rates in the Pacific region.
Coal shipments from Indonesia to China remain attractive, despite some recent disruptions due to the coronavirus lockdown.
Freight demand in the Black Sea and Mediterranean regions is also “dynamic”, with many market inquiries, but the main concern now is the reduction in available tonnage.
The same is true for the east coast of South America, where demand is huge and vessel rentals charge a fixed rate depending on the destination.
Operators say this is one reason lessees are willing to pay more to complete their leases as quickly as possible.
Demand from the Mediterranean has kept charter prices stable, with VLCCs from Turkey via the Black Sea to Nigeria understood to be chartering at US$50,000 per day. Most other ships are chartered for between $30,000-$40,000 per day.
Danaos Corporation, a Greek container shipowner listed in New York, said it expects the bull market in the charter market to continue at least until the end of next year.
Shipping lines are competing fiercely and are doing whatever it takes to address the small number of open vessels entering the market, causing daily rates to soar and greatly extending charter periods.
Danaos reported very strong second quarter and first half earnings, with charter revenue accumulated through 2028 reaching $1.75 billion.
Danaos CEO John Coustas said: “The epidemic has caused inefficiencies in the supply chain, and there are no obvious signs that the situation will return to normal in the near future.”
In the second quarter of this year, net leasing revenue for its 60 container ships (ranging in size from 2,200 TEU to 13,100 TEU) was US$69 million, compared with US$42.5 million in the same period in 2020, a year-on-year increase of 62.4%.
“The container ship market has maintained positive momentum, which is reflected in the growth of container and ship leasing rates. The market will be in short supply until at least the end of next year.” Coustas said .
Underscoring its confidence in the strong medium-term performance of the containership charter market, Coustas noted that the ships it purchased last month for $43 million each, according to the latest Vesselsvalue data, The ships are now worth $74 million each and rising.
After deducting the daily operating costs of US$6,000, the daily rental fee of approximately US$18,000 will bring considerable income to Danaos. But the shipowner has a longer-term view and may receive a daily lease fee of US$60,000 from charterers such as Maersk.
So far, soaring charter rates have not had a big impact on the profits of liner companies, because the same soaring container freight rates have brought huge profits. However, when ship charters are extended, costs will start to hit liner companies, especially if this coincides with the bursting of the freight bubble.
In fact, Maersk has just significantly raised its full-year performance forecast. In its performance report, soaring charter costs were the only negative factor. </p
