Newbuilding Activity Rising, as Ship Owners Are Looking for More Dry Bulk Tonnage

Newbuilding activity seems to have picked up lately, despite contrasting reports from shipbrokers. However, what they all seem to agree to is that ship owners are actively looking to acquire more secondhand dry bulk tonnage. In its latest weekly report, Allied Shipbroking said that “despite the softening trends that are being witnessed in the freight markets of both the dry bulk and tanker markets as of late, newbuilding activity was on the rise this past week. On the dry bulk side, there is an increased amount of interest for smaller size segments, which helped drive 6 new orders this past week. The less volatile stream of earnings that smaller dry bulk carriers offer seems to have made them much more attractive under the current prevailing uncertainty that shrouds the market. This pattern could well continue during the second quarter of the year as well, especially given the difficulties that are still expected to be faced by the larger capsize and panama vessels over the coming months. On the tankers side, activity was not as impressive, but still higher than what has been seen during the previous couple of weeks. Specifically, last week news emerged of 7 new tanker orders across different size segments. The market outlook remains relatively strong, but with freight rates still under pressure, market participants seem hesitant on proceeding in in excessive ordering for the time being”.

In a separate report this week, Banchero Costa said that the “newbuilding market wasn’t extremely active last week, but very diversified when it comes to the type of ship being ordered. In the Dry bulk sector, Wisdom Marine returned to his preferred country (Japan) to order 2 Ultramax Tess 64 Aeroline with Tsuneishi (Zhoushan facilitiy) for dely in Early2021 and 1 Handysize 38k dwt from Namura for dely End2020 and Early2021. In the Tanker market, Kyklades Maritime contracted 2 Suezmax around 158k dwt at HHI with 2 options; dely is set for FH2021 and will be fitted with Hybrid scrubber. Contracting price reported region $65/66 mln each. Japanese owner Meiji Shipping signed a contract for 4+2 MR tankers around 50k dwt with Hyundai Mipo as part of the package so called “Solar Project” which involves Shell as Charterer for 5 years. The ships will be built with scrubber fitted, price $38 mln each. Another single MR order was placed in Japan at Minami Nippon by local owners Asahi Tanker for delivery in Feb2020. An order for 1+1×18,000 dwt Imo II chemical tanker was concluded at AVIC Dingheng, for delivery Q42020, ice class 1A. An additional LNG carrier was optioned at Daewoo as part of the Maran Tanker original order for 174k cbm, dely End2021 at undisclosed price. Smaller segment 4 MPP vessels were contracted by German Owners Messrs Briese at Taizhou Sanfu for dely 2020. Whilst we have no further details on the design (weather heavy lifter or conventionally geared), the reported price is $18.5 mln”, said Banchero Costa.

Meanwhile, in the S&P market, the shipbroker commented that there was “quite a good number of transactions took place last week especially on dry. Two Panamax BC Japanese built were reported sold: the “Ascanius” around 76,800 dwt 2004 built Oshima reported sold basis SS/DD passed for $ 8.5 mln to Clients of Newport, while the “Osmarine” around 76.500 dwt 2004 built Imabari at region $9.2 mln. On Supramaxes, still big price differences were recorded between Japanese (or Japanese related) yards compared to Chinese ones: the “Viloa” around 58,700 dwt 2008 built Tsuneishi Cebu was reported sold to Clients of Belship at $13 mln (payment 50- 50 cash and shares), while the “Medi Lisbon”, same deadweight and yard but 2006 built, was reported sold at $10.75 to Cleints of Akij, Bangladesh, in contrast to the “Tomini Ability” around 56,900 dwt 2010 built Zheijiang, which was reported sold to Chinese Buyers at $ 9.8 mln. Clients of Cosmoship were said to be the Buyers for three Handysize sisters “CMB Giulia”, “CMB Adrien”, “CMB Catrine” around 32,600 dwt each, built 2012/2011/2012 in China, at a price of $27 mln enbloc. On the tanker sector, two VLCCs were reported sold last week: the “S Glory” around 318,000 dwt 2004 built Hyundai to Clients of Smart Tankers at $30.5 mln and the “Formosapetrol Challenger“ around 281,500 dwt 2001 built IHI, which was reported sold to undisclosed Buyers at $19 mln. Two coated Aframax “Sea Pecos” and “Sea Tanana” around 115,600 dwt 2018 built Daehan were reported sold to Clients of Advantage Tankers for $97.8 mln enbloc”, Banchero Costa concluded.

Similarly, Allied Shipbroking said that “on the dry bulk side, the level of activity continued to rise once more after the brief pause experienced during previous weeks. Up to now, buying interest has mainly focused on smaller sizes, such as Supramax and Handysize, moving inline too with what was seen in the newbuilding market as well. This trend in buying preference for the smaller size tonnage is likely to extend into the second quarter of the year as well. On the tanker side, the market has held more stable lately, with activity remaining at firm levels for yet another week. This past week, deals were limited to the VLCC and products segments. The positive outlook for both the crude and products markets has helped push interest for some of the more attractive candidates circulating the market and gearing up expectations for further positive developments to be seen in SnP activity over the coming weeks”, the shipbroker said.

Nikos Roussanoglou, Hellenic Shipping News Worldwide