Dry bulk newbuilding orders pick up on improving market sentiment

Shipbrokers are reporting multiple newbuilding ordering activity over the course of the past week, mainly as a result of improving market sentiment in the dry bulk segment. In its latest weekly report, shipbroker Allied Shipbroking said that “after a period of poor activity, an interesting week was due for the newbuilding sector, with many new contracts being reported. This week’s flow is highly attributed in the dry sector, with several new projects coming to light, many with options attached, showing a growth in keen interest. To an extent, this rebound reflects the considerable improvement noted in the freight market during the past two months and the general uptrend in sentiment, despite the downward correction noted recently. As we enter the final quarter of the year which is traditionally stronger in terms of earnings, expectations are for a firm flow of new contracting to continue if not further intensify. However, with given the volatility typically noted in the newbuilding market in terms of activity and the overall mixed messages coming from the market, it is difficult to evaluate the investment appetite of ship owners and their overall confidence in the general market outlook. This becomes especially important when taking into account the potential for price increases in the near-term and given the difficulties in terms of financing and the limited availability of capital”.

In a separate newbuilding report, shipbroker Clarkson Platou Hellas said that there was “only one order to report in Tankers this week, with Rosneft JSC placing an order for five firm 114,000 DWT Ice Classed Aframax Tankers at Russian compatriot Zvezda Shipbuilding for delivery throughout 2021 and 2022. Zvezda have set up a joint venture with Hyundai Samho and have signed a technical support agreement earlier this year. In Dry, HHI have won an order for a series of ten firm plus five optional 325,000 DWT “LNG-ready” VLOCs from domestic owner Polaris Shipping. The vessels are reported to deliver throughout 2021 and backed by a long-term COA to Vale. Shanghai Waigaoqiao Shipbuilding (SWS) have signed a contract with Foremost Maritime for two firm 180,000 DWT Capesize Bulkers. Both vessels are due for delivery in 4Q 2019. From Japan, Oshima Shipbuilding is reported to have received an order from Fednav for six firm 34,500 DWT Ice Class 1C Handy Bulk Carriers for delivery throughout 2021. In the Container market, Samsung Heavy Industries have won an order for six firm 22,000 TEU Container Carriers from MSC for delivery within 2019. This follows MSC’s order last week at DSME for five firm 22,000 TEU Container Carriers”, Clarkson Platou Hellas concluded.

Meanwhile, in the secondhand ships’ sales activity, Allied noted that “on the dry bulk side, activity continues to hold at relatively strong levels with prices still showing a bullish investment approach and further prices hikes expected to emerge over the coming days. Attention seems to have slowly switched towards older aged tonnage with the majority of vessels changing hands this week aged between 10 and 15 years of age. Prices have played their role here too, with modern vessels now looking relatively pricey for most potential buyers, while at the same time there still seems to be a favorable discount at hand for vessels above 10 years of age. On the tanker side, the market sparked back into life this past week, with activity rising sharply and a couple of large deals coming to light. The focus was firmly on the product tanker range, with most of the vessels changing hands being in the MR size segment. There still seems to be a softening in terms of pricing”.

In a separate note, ships’ valuations experts VesselsValue said that in the dry bulk market values increased across all ship types. “The Carouge (177,300 DWT, Namura, Jul 2003) and the Chambesy (171,100 DWT, Hyundai HI, Jan 2004) sold to BW Cargo for USD 14.8 mil and USD 15.2 respectively vs VV value USD 14.14 mil and USD 14.45 mil. The Ultramer (Ultra 63,200 DWT, Zhejiang Shipbuilding, Oct 2014) was sold to Navigare for USD 18.6 vs VV value USD 17.22 mil.

VV concluded”. In the tanker market, values remained stable, as the “Atlantic Diana and the Atlantic Blue (47,100 DWT, Hyundai Mipo, Nov/Jul 2007) sold for USD 16 mil each vs VV value USD 16.31 mil and USD 15.86 mil respectively”, VV concluded.