Market Commentary:

During the first weeks of 2022 we saw the Omicron variant continue its rapid spread. An increase in COVID-19 infections was reported in the Chinese port city of Tianjin, leading to partial lock downs, as mandatory measures to stop the virus from spreading.

But China detected omicron in a second major port city, Dalian, adding more concerns that the vastly more infectious variant could spread quickly across the world’s largest trading nation, upending global supply chains, and threatening the Winter Olympic games. The partial lockdowns in Tianjin forced Toyota Motor Corp. to suspend operations at its joint-venture car making plant & Volkswagen Group's China has shut a component factory as well a vehicle plant. As Tianjin and Dalian are trying to control the Omicron variant cases, ships seeking for “free covid” ports, are heading for Shanghai, causing growing congestion & delaying schedules for container ships by about a week, delays which could ripple as far as the U.S.A. & Europe.

Although Omicron variant has pushed COVID-19 cases above peak levels, it has not impacted fuel demand the way previous variants did. Oil prices will be supported by governments' reluctance to impose the same strict restrictions that crippled global economies when the pandemic began in 2020. As investors weigh a bigger-than-expected drop in US crude inventories against mobility restraints in Asia, WTI crude futures trading close to $84 per barrel, a shade close to the multi year high price of USD 85.41 back in end October 2021. According to the EIA report, US crude inventories fell by 4.553 million barrels last week, the biggest decline since October 2018, while the market anticipated a drop of 1.904 million barrels. It is rumored that China agreed in a plan coordinated by the USA to release national strategic stockpiles of crude oil, in order to reduce global prices and this may well happen around the Lunar New Year Holidays. Even though Omicron has not so far negatively impacted the demand for oil & products and oil prices are stabilized at high levels, the Tanker indices, BCTI & BDTI are still going south losing 30% and 12,2% respectively during the past 30 days. BCTI has hit its lowest point since 10th of November 2021, while BDTI was at similar levels during the first 10 days of October 2021.

On the dry bulk side, BDI landed at the lowest point since 3rd of March 2021 while BCI has lost around 71% since 8th of December 2021 and BSI, BPI, BHSI have lost around 25% during the same period. Coal futures are trading above USD 220 a tonne, a 2-month high, backed by strong demand and despite Indonesia lifting its coal export ban. Government sources said they still need to ensure there will be enough domestic supply of coal and so permission to export coal was given only to mining companies that reserve 25% of their 2021 coal production for domestic utilities. Indonesian large coal producers cover that obligation, but majority of smaller producers don’t meet their domestic coal supply target and are still banned from exporting. Prices of iron ore have risen above USD 126 a tonne, hitting the highest level since mid-October. In China, the weaker-than-expected inflation rate, boosted expectations that the central bank will be providing more stimulus in the coming months to support the slowing economy and the real estate sector combined with the partial halted operations of the Brazilian miner Vale due to heavy rains, the key factors for the Iron ore price comeback.

There are major concerns being raised over inflation, as major economies of the world are being hit by inflationary waves. During the last quarter of 2021, U.S. consumer prices spiked by the most in four decades, sapping the purchasing power of American families. According to Labour Department latest data, consumer prices have increased by 7% in 2021, the biggest 12-month gain since June 1982. Despite forecasters' expectations, inflation rose by 0.5% from November. Following these facts, the stage is set for the Federal Reserve to begin hiking interest rates as early as March, a movement that possibly will be copied by more Central banks in order to put a barrier on the inflationary pressures. In contrast with the other central banks, China’s central bank moved the other way, lowering the borrowing costs for the first time since April 2020, as China is resisting the inflationary wave. In Dec 2021 the inflation rate fell to 1.5% from a 15-month high of 2.3% in Nov 2021. China’s economy has also rebounded from its pandemic slump growing 8.1% in 2021, exceeding market consensus of 8% & reaching well above governments target of 6%.

Capesize: The capesize 5T/C route continued its downward move. Started the week at USD 20,167/day to close down by more than $7.7k at USD 12,407/day. Trip from Cont. to F.East is down at USD 35,775/day, Transatlantic Return voyage is now USD 19,300/day, while Pacific Return voyage is heavily rediced at USD 6,242/day. Capesize 1 year T/C rate is now USD 23,750/day, while eco 180k Capesize is USD 25,000/day.

Panamax: The BPI-82 5T/C route average started the week at USD 26,610/day to close down by more than $5k/day at USD 21,376/day. Trip from Skaw-Gib to F.East is down at USD 32,432/day, while Pacific Return voyage is softer at USD 18,552/day, while Atlantic R/V is USD 21,275/day. Kamsarmax 1y T/C rate is USD 24,500/day, while Panamax 1y T/C is USD 23,000/day.

Supramax: The BSI-58 10T/C route average closed the week about $2k/day lower than its opening at USD 20,868/day. South China trip via Indonesia E.C.India is down at USD 15,900/day, W.Africa trip via ECSA to N.China is softer at USD 31,475/day, Med/Bl Sea to China/S.Korea is USD 30,067/day, Atlantic R/V pays USD 18,078/day, while Pacific Return voyage pays USD 18,164/day. Ultramax 1y T/C rate is USD 25,500/day, with Supramax 1y T/C at USD 22,750/day.

Handysize: The BHSI-38 7T/C route average, closed the week softer at USD 21,464/day. Brazil to Continent pays USD 30,883/day, S.E.Asia trip to Spore-Japan is USD 22,431/day, U.S.Gulf to Continent is USD 22,179/day. 38K Handy 1y T/C rate is USD 21,750/day, while 32k Handy 1y T/C is USD 19,250/day.

Crude:

VLCC average T/CE ended the week at USD -13,903/day. M.East Gulf to China trip at USD -4,362/day, US Gulf to China at USD -1,154/day, M.East Gulf to Singapore at USD -1,704/day, W.Africa to China at USD -1,210/day, M.East Gulf to US Gulf at USD -23,444/day. 310k dwt D/H Eco VLCC 1y T/C is USD 22,500/day.

Suezmax average T/CE closed the week at USD -3,293/day. Trip from W.Africa to Continent is at USD -1,256/day, Bl.Sea to Med is at USD -5,330/day, Middle East Gulf to Med at USD
-12,781/day. 1 year T/C rate for D/H Eco 150k dwt Suezmax is USD 20,250/day.

Aframax average T/CE closed the week at USD 5,101/day. Trip from N.Sea to Continent is at USD -2,760/day, trip from Kuwait to Spore is USD 1,457/day, trip from Carribs to US Gulf is USD 1,007/day, and S.E.Asia to EC Australia is at USD 4,717/day. 1 year T/C rate for D/H Eco Aframax is at USD 18,750/day.

Products:

The LR2 route (TC1) M.East Gulf to Japan is this week is USD 1,635/day. Trip from Middle East to F.East is USD -10,266/day, the LR1 (TC5) route Mid.East Gulf to Japan is USD 2,331/day, and Amsterdam to Lome is at USD 5,913/day. The MR Atlantic Basket earnings is at USD 9,735/day, with MR route from Cont. to USAC at USD 5,684/day, US Gulf to Cont. at USD -808/day, US Gulf to Brazil at USD 8,455/day, ARA to W.Africa at USD 8,097/day. TC6 Intermed Route is USD 13,814/day. Eco LR2 1y T/C is USD 20,000/day, & Eco MR2 1y T/C is USD 15,750/day.

Sale and Purchase:

On the dry bulk S&P, activity was subdued during this past week, with only a handful of transactions to report. On the Panamax Sector, the BWTS fitted "Coral Diamond" - 77K/2007 Imabari sold for low/mid USD 16 mills to Chinese buyers. On the Supramax Sector, the BWTS fitted “HTC Delta” - 56K/2014 Taizhou Sanfu committed to Chinese buyers for region USD 18 mills. The Handysize "Crimson Princess"- 38K/2012 Naikai was sold for region USD 19 mills to Greek buyers.

On the tanker side, it was a rare, interesting week with many transactions being reported. 4 x Vlcc's found new owners, with the "Wu Yi San"- 318K/2012 Shanghai Jiangnan sold for around USD 38 mills through auction, while the BWTS fitted "Sea Lynx" sold for region USD 32 mills. Furthermore, different Greek buyers acquired the "New Talisman" - 296K/2009 Bohai for USD 36 mills and the BWTS fitted "Tsushima" - 310K/2008 Mitsui for USD 36.5 mills. On the M2 sector, "Ps Milano" 50K/2008, SPP sold for region USD 11.3 mills to Turkish Buyers. Finally, on the MR1 Sector, the "Gulf Moon" - 37K/2007 HMD, the "Gulf Mews" - 37K/2007 HMD & the "Gulf Mist" - 37K/2007 HMD were sold enbloc for mid/high USD 7 mills each.