Newbuilding Activity Limited But Expected to Revive Soon

As the summer lull nears its end, market participants expect the newbuilding ordering activity to pick up. In its latest weekly report, shipbroker Allied Shipbroking commented that “observed activity over the past two weeks was rather limited in the newbuilding market, with few new contracts coming into the spotlight. With the summer period ending now, market players expect activity to start increasing over the next few weeks, as the slowdown of late does not reflect the market appetite that has ben observed over the past couple of months. Newbuilding prices remained relatively steady during these two weeks, despite the lack of activity, enhancing the view that the current lack of new orders is due to the summer lull. From the few new orders published the past two weeks, no considerable new contracting activity in terms of volume was seen in the dry bulk or tanker sector. On the contrary, contracts for 6 new vessels were placed in the gas sector from European and Far Eastern interests, while a couple of new orders also seen in the containership and offshore sectors”.

In a separate report, Clarkson Platou Hellas said that “in dry, Wuhu Shipyard announced orders from Ningbo Runhua Marine and a yet unconfirmed buyer, each for 1 firm 64,000dwt Ultramax – with delivery due in 2020. New Times also received an order from Pan Ocean for two firm plus one option 64,000dwt Ultras similarly with delivery due in 2020. Daehan Shipbuilding secured further orders for Aframax with clients of Enesel placing contracts for two firm 114,000dwt crude tankers for delivery in 1H 2020. Samsung and GasLog announced newbuilding contracts for 2 firm 174,000cbm LNG carriers with both vessels due to deliver within the end of 2020. Jiangnan Shipyard also announced receiving their first LNG order, with Jovo Group contracting two firm 79,800cbm ‘Sino-Flex’ vessels with delivery due in 2021”.

Meanwhile, in the S&P Market, Allied said that “on the dry bulk side, activity remained on a fair level considering the typical summer lull that dominates the market during August. The market fundamentals and the improved rates that have been seen lately have improved the investors sentiment, with most market participants already expecting a gear up in activity the upcoming weeks. At this point, most reported transactions involved units of more modern age, while we continue seeing a fair amount of interest also for vintage units. On the tankers side, activity in the past two weeks was rather subdued. Given the absence of the massive en bloc deals that have nourished to a high degree lately the overall S&P activity, the current clampdown was rather anticipated. Notwithstanding, given that buying interest exists when the “right” opportunity arises, we may well expect a fair volume of transactions taking place, especially after the typical summer slowdown is faded away”.

In a separate weekly note, VesselsValue said that in tankers values have remained stable with the exception of Aframax and LR1’s, which have slightly softened in modern tonnage. “LR2 Glory Crescent (105,400 DWT, Jan 2013, HHI) has been concluded for USD 25.3 mil to an unknown Asian company, VV value USD 26.7 mil. The vessel is uncoiled. MR2 PTI Phoenix (51,300 DWT, Feb 2007, STX) sold for USD 13.5 mil to Greek buyers, VV Value USD 14.3 mil. Small Chemical Yuhua Star (16,000 DWT, Mar 1997, Shin Kurushima Hashihama) sold for USD 5.7 mil to Chinese buyers, VV Value USD 5.12 million”.

Similarly, in the bulker segment, values have also remained stable. “Navios has exercised a purchase option to acquire Supramax Navios Primavera (53,500 DWT, May 2007, Iwagi Zosen) was sold for USD 10.5 mil vs VV value USD 12.73 million. Handy (Open Hatch) Newchang (38,800 DWT, April 2017, Huanghai Shipbuilding) was sold for USD 18.9 mil vs VV value USD 17.85 mil.

Handy Global Arc (34,400 DWT, Jul 2013, Shin Kochi) was sold for USD 15.3 mil vs VV value USD 15.56 mil. Handy Gloria Island (28,400 DWT, July 2012, I-S) was sold for USD 10.3 mil vs VV value USD 12.11 million”.

Nikos Roussanoglou, Hellenic Shipping News Worldwide