Newbuilding Prices Rising Trend Continues as Buying Interest Intensifies

The slumping days of the newbuilding ordering market seem to be over. Prices have been on the climb over the past few weeks, a trend which has continued unabated during the course of the past week as well. In its latest weekly report, shipbroker Allied Shipbroking noted that the fact that prices are moving upwards has also led to disruptions on buying interest as well, as many are waiting to see what best deals are on offer still.

According to Allied, “one of the major factors that has influenced the pricing front has been the increases being noted in terms of specifications on offer, with most of the price quotes being offered being for TIER III engines, especially in the case of slots being quoted from Chinese shipbuilders. At the same time there is also a significant cost to take under consideration with regards to which BWTS to go for. There is still a considerable amount of interest that is primarily focused in securing slots with early delivery at the current going prices, betting on the fact that prices will continue to climb further during the year. There may well be some truth in this and the fact that secondhand prices have increased during the past 4 -5 months has helped, however in terms of pricing there is still a slight advantage when choosing to go for a secondhand vessel, as such keeping orders still at subdued levels”, said the shipbroker.

Meanwhile, in the S&P market, in the dry bulk segment, VesselsValue noted that “values have softened a small amount this week.

The Capesize Hyundai Talent (180,000 DWT, Apr 2012, Sungdong) sold to Navios Maritime Partners LP for USD 30.5 mil vs VV 32.22 mil. The Panamax BC Frontier Hero (81,000, Jul 2014, Japan Marine United) sold from MC Shipping Ltd to Hydroussa Navigation Ltd for USD 24 mil vs VV 24.76 mil. The Supramax BC V Gannet (51,500 DWT, Jan 2001, STX Offshore) sold from Valhalla for USD 6.6 mil vs VV 6.77 mil slightly softening Supramax values. The Handy BC Global Peace (31,900 DWT, Aug 2001, Hakodate Dock) sold to Pacific Basin Shipping from United Ocean Group for USD 10 mil vs VV 11.21 mil softening values”, said the ships’ valuations expert.

In the tanker segment, it noted that “tanker values have remained stable this week. The VLCC Amantea (309,300 DWT, Samsung, Apr 2002) sold SS passed March for USD 24 mil vs VV USD 23.02 mil. The Aframaxes Ratna Shruti, Shradha & Namrata (105,800 DWT, Apr/Jun/Jul 2008, Hyundai HI) sold en bloc to Centrofin for USD 65 mil vs VV USD 61.73 mil. The High Fidelity (50,000 DWT, Aug 2014, Hyundai Vinashin) sold for USD 27 mil vs VV USD 26.95 mil keeping modern MR values stable”, VV said.

Meanwhile, in a separate note, Allied said that “on the dry bulk side, the slowdown seems to have continued for yet another week, while the firm prices continue to prevail. The recent downward correction in the freight market seems to have spooked buyers slightly while the fast passed increases noted of late have caused both buyers and sellers to take a step back and re-evaluate their respective positions. On the tanker side, there continues to be a stronger reception by buyers on the product tanker sizes. Activity in this sector has improved considerably from where it was a couple of months back and at the same time we have started to see this being reflected slowly on the pricing front as well. There is still a long road ahead before we can say that the market has recovered much of its downward correction from last year, while given the current state of the freight market it is unlikely that we will see this soon”, the shipbroker concluded.