Dry Bulk Freight futures volatility collapsed to record lows in July as spot rates remained rangebound. The highly volatile dry bulk freight market has been in a “deep summer hibernation” for the past two months, according to Breakwave Advisors. Dry bulk spot rates and freight futures have been incredibly stable in June and July remaining in a tight range with little indication of breaking out either way anytime soon. Another record stat picked up by Breakwave Advisors this month involves dry bulk’s most important country. The difference between iron ore imports and implied iron ore demand in China has now reached record high levels for the past year, according to Breakwave Advisors who warn that the steel complex in China continues to be under pressure, with negative margins, sizeable supply of iron ore and tepid demand for steel, all of which does not bode well for the near-term outlook of iron ore imports and thus dry bulk freight demand. Containers Since the beginning of the year, the capacity of the containership fleet has increased by 1.6m teu. Compared to one year ago, the capacity has risen 11% to 29.5m teu, the fastest fleet growth in 15 years, according to Niels Rasmussen, chief shipping analyst at BIMCO. During the first half of 2024, the delivery of new ships reached a new high. A total of 264 ships with a combined capacity of 1.6m teu have been delivered from shipyards, two thirds more than during the first half of last year when the previous record was set. Despite the record, shipowners have continued to place orders for new ships. Year-to-date, a total of 63 ships with a combined 0.4m teu capacity have been ordered and the orderbook-to-fleet ratio remains high at 19%, according to BIMCO data. The orderbook contains orders for delivery in 2028 and an average of 1.5m teu are scheduled for delivery each year between 2025 and 2027. The combined capacity of 12,000 to 17,000 teu ships has grown the fastest. This segment is now the largest within the container fleet, making up 22% of the fleet. Tankers VLCC rates reached a six-week high this week driven by Middle East and West African activities. Clarksons forecasts crude fleet to drop by 0.1% in 2024 versus a 3.3% growth in tonne-miles demand. Product rates have softened by 36% from their recent high at end May. Clarksons sees the product fleet growing by 1.8% this year versus a 7.5% growth in tonne-miles demand, supported by the Red Sea detour, growth in global oil demand (+1.2%) and refinery capacity (+1.8%). Running contrary to the Clarksons forecasts, Vortexa suggests crude tanker tonne-miles are below 2023 for the last three full months of 2024. On the volume side, VLCCs have been hit mainly from a decline in OPEC+ flows which has caused a dip in utilisation. Similarly, suezmaxes have been affected by Atlantic Basin exports, which have plateaued since January, at a time when sluggish demand in Europe continues. For aframaxes, thinning Russian crude exports and a continuing exodus of Western-operated vessels from the Russian trade has for one imposed lower voyage distances, but has also raised mainstream vessel supply for the segment, exerting downward pressure on rates. TagsSplash Extra Archive Splash Extra July 2024