Newbuilding Ordering Activity Picks Up on Renewed Ship Owners’ Demand

TIN news:  Demand for newbuildings has slowly started to climb, as shipyards have started to increase their prices. It’s a sign that some ship owners have attempted to catch this trend in its beginning and procure vessels at the near historically-low levels of pricing, before more shipbuilders increase their prices. In its latest report, Allied Shipbroking said that “the newbuilding market has been seeing some slow sparks of life, though this is not the main driver behind the recent price hikes that have been noted on the offers from shipbuilders. The combination of a push towards higher spec units by shipbuilders and the increased costs of construction have pushed for a significant rise in the price being quoted for dry bulk vessels. This is likely to continue further, especially given the fact that at the current prevailing price levels there are still a number of S. Korean and Japanese shipbuilders which are unable to compete. Given the recent trends, we have also started to see a growing interest from potential buyers, many of which are looking to secure these current price levels before they break away to much higher levels. As such we are still on speculative ordering rather then ordering on market fundamentals, as even though secondhand asset prices have increased they are still to low to excuse the growing interest in newbuildings”.

In a separate newbuilding report, Clarkson Platou Hellas said that “this week Samsung Heavy Industries have signed contracts for four firm 319,000 DWT VLCC Tankers with BW Maritime. Delivery of the vessels will be within 2019. BW Maritime are understood to have options for further vessels. In Dry, Reederei H. Vogemann have placed an order for four firm 38,800 DWT Open Hatch Bulk Carriers at Taizhou Kouan Shipbuilding. These vessels are set for delivery from the end of 2018 through to 2019 from China. Samsung Heavy Industries have won another order this week with signing a contract for two firm 7,500 CBM LNG Carriers with Korea Line Corporation. Delivering in May and December 2019, the duo will carry LNG cargos from Tongyeong to Jeju Island in South Korea for Korea Gas Corporation (KOGAS). In other sectors, Sunstone Ships Inc. have now announced the order for four firm plus six optional 7,000 GT Cruise Ships at China Merchants Heavy Industry in China. The firm four vessels will deliver throughout 2019 and 2021 and will be built to be Ice Class 1A”, the shipbroker concluded.

In the S&P markets, Allied Shipbroking noted that “on the dry bulk side, “a notable slowdown was to be noted this week, with activity now considerably slower then what we have become accustomed to over the past couple of months. Despite this we are still seeing improvement in prices, though given the slower pace of transactions and the slight correction in rates, we may well be reaching a plateau in this regard, waiting for the next rally in freight rates for further price gains to be noted. On the tanker side, things are still relatively slow, though we did manage to see a couple of sales in the larger crude oil carriers this week, something that had been missing from the market for some weeks now. On the product tankers range interest is still there and prices have once more started to show some upward movement, though this has mainly been for the more modern tonnage rather then for vessels beyond 10 year old”, said the shipbroker.

In a separate note, ship valuations specialist VesselsValue said that in the dry bulk market, “bulker values have remained stable.

The Panamax Fu Min (72,400 DWT, Jul 1997, Sasebo) sold from COSCOCS Bulk Shipping for USD 5.2 mil. The Supramax Marjatta P (56,000 DWT, Apr 2006, Mitsui Ichihara) was bought by United Shipping Lines for USD 11.95 million”.

In the tanker segment, “modern VLCC values have firmed this week. Most other values have remained stable. One month subs are now lifted on modern VLCCs Gener8 Noble & Theseus (320,000 DWT, Nov 2016, Hyundai Samho HI). The sale was concluded at USD 81 mil per vessel firming values. The Suezmax Gener8 Orion (160,300 DWT, Mar 2002, Samsung) sold SS due for USD 13.3 mil vs VV USD 14.53 mil. The MR2 STI Sapphire & Emerald (52,000 DWT, Jan/Mar 2013, Hyundai Mipo) sold en bloc for USD 56.4 million”, VV concluded.