The number of new Capesize vessel orders has increased significantly in 2024 compared to the previous year. While there’s growing interest in dual-fuel vessels with lower emissions, the majority of new orders are for traditional vessels. However, there’s a notable increase in interest for vessels that are “ready” for alternative fuels, suggesting a shift towards a more sustainable future for the shipping industry, according to Breakwave Advisors.
China Leads
According to Baltic Capesize Newbuilding (CDINBA) data, newbuilding prices reached a peak at $73.62 million in November, a 14.6% rise since January. In comparison, Capesize prices increased by 5.74% in 2023, whereas for the first eleven months this year the prices have soared by 11.6% y-o-y.
Among the buying countries with the highest number of new ship orders, China ranks first, followed by Singapore in second place, and Cyprus in third. Approximately 77% of large-sized fleet orders were placed with Chinese shipyards, with 60% of these orders directed to private shipyards. Notably, Hengli shipyard alone holds 12 of these orders. Other large-sized fleet new orders are mainly secured by Japanese shipyards, such as Namura Imari, JMU Ariake, and JMU Kure. Additionally, Philippine’s shipyard Tsuneishi Cebu has secured orders for eight OverPanamax vessels.
Second Hand Market
The number of second-hand large-sized fleet transactions totalled 232 in the first eleven months of this year, surpassing the number recorded in the corresponding period of last year by 0.8%. The sharp increase in Capesize C5TC freight rates at the end of 2023 spurred a surge in transactions, peaking in February with the highest monthly volume recorded since May 2021. A portion of the increased activity was likely driven by shipowners renewing their fleets and capitalizing on rising asset values. However, it is also notable that some shipowners who had never previously entered the large-sized fleet market.
For instance, it was reported that Jinhui Shipping and Transportation added its first Capesize vessel to its bulker fleet for $30.95 million in February. This deal is part of Jinhui’s ongoing fleet renewal strategy, following the sale of older vessels in several deals last year. In early October, it was reported that Chinaland Shipping, which has traditionally focused on the Supramax segment, in August entered the Capesize market with several second-hand Capesize bulkers. Moreover, they further expanded their fleet by acquiring a Newcastlemax, MV Crassier (2007 Imabari built, 206,000 Dwt). In addition, Fujian Highton added its first Capesize from Greek shipowners in September.
Chinese buyers have been actively buying significant numbers of second-hand vessels, making up nearly half of total transactions in the large-sized fleet segment this year. Specifically, they have purchased 41% of vessels that are over 15 years old. Benefiting from a series of economic stimulus measures by the Chinese government, leasing companies have been offering highly competitive rates, even providing 3-year financing plans for vessels over 15 years old, which has drawn the interest of buyers.
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Source: Breakwave Advisors
