07-05-2021 Amid busy week for period deals, Diana kamsarmax fixed at more than twice the previous rate, By Harry Papachristou, TradeWinds
Diana Shipping announced on Friday yet another period deal for one of its bulkers at far higher levels than the same ship achieved under its previous employment. Bocimar International fixed the 82,100-dwt karmsarmax Myrsini (built 2010) for about six months at $27,750 per day, the US-listed company said in a bourse filing. That compares with the $11,500 per day that the Myrsini was earning so far under a charter with Ausca agreed in December 2019. “Given that the FFA five-month implied value for such a vessel is between $26,000 and $26,500 daily and this week’s BPI 82 5TC closing was very close to these levels, charterers had to pay a premium to entice owners to wrap this short-period deal up,” research analysts at Athens-based Doric Shipbrokers told TradeWinds in an e-mail.
The Myrsini deal rounds up a week “full of activity” for chartering desks specialised in period fixtures, Doric said. Until late Friday Europe time charterers were bidding eco-units with delivery Far East at between $27,000 and $28,000 per day, according to Doric’s analysts. “Colossal” stimulus measures taken across the world keep sentiment buoyant as dry bulk shipping enters its seasonally strongest period of the year in the late second and third quarters, they added.
Companies like Diana Shipping are benefiting from that trend. The company clinched period deals for five of its vessels over the past two months – two newcastlemaxes, one capesize, one post-panamax and the Myrsini. The freight rates the company achieved in those deals were more than 70% higher, on average, than in the immediately previous ones for the same vessels, according to TradeWinds calculations.
In another remarkable deal in late April, Diana said it achieved the highest rate for the 206,000-dwt Philadelphia (built 2012) since it started operating the ship. Classic Maritime agreed to fix the vessel for about a year at $28,500 per day.
The five chartering deals combined will boost Diana Shipping’s gross revenue by nearly $33m over the lifetime of the charters, which extend between six months and one year.
With higher freight rates becoming increasingly entrenched, analysts and investors start shifting their attention to whether bulker companies will manage to lock in such elevated earnings for even longer periods. Some two-year fixtures have already been concluded and several shipowners are optimistic that their number and duration will increase in the near future.
Fixtures of more than three years could be seen as soon as in the third quarter, said on Thursday Polys Hajioannou, founder and chief executive officer of Safe Bulkers – a competitor of Diana Shipping. Conditions for such long deals will ripen when the price of forward freight agreements (FFAs) for 2022 increases, Hajioannou said. At the moment, FFAs are still in backwardation, partly on concerns over India’s health crisis. Looking forward, however, “market sentiment remains robust, with fitter fundamentals supporting a quite positive scenario for the months to come,” said Doric.