Newbuilding Bulkers’ Prices on the Rise, as Ship Owners Turn to Higher Spec Vessels
Newbuilding activity is on the rise for a number of reasons, but demand isn’t the sole reason of the recent price hikes, which have been noted from shipbuilders. According to the latest report from shipbroker Allied Shipbroking, “the combination of a push towards higher spec units by shipbuilders and the increased costs of construction have pushed for a significant rise in the price being quoted for dry bulk vessels. This is likely to continue further, especially given the fact that at the current prevailing price levels there are still a number of S. Korean and Japanese shipbuilders which are unable to compete. Given the recent trends, we have also started to see a growing interest from potential buyers, many of which are looking to secure these current price levels before they break away to much higher levels. As such we are still on speculative ordering rather then ordering on market fundamentals, as even though secondhand asset prices have increased they are still to low to excuse the growing interest in newbuildings”.
In a separate note, Clarkson Platou Hellas said that “in tankers, Hyundai Heavy Industries (HHI) are reported to have received an order for two firm plus two optional 319,000 DWT VLCCs from Frontline. The firm two units are set for delivery in 2019. Euronav have announced an order for two 160,000 DWT Suezmax Tankers at HHI for delivery within 2H 2018. These vessels will be built to be Ice Class 1C. Clients of Central Shipping Monaco have extended their series at Hyundai Vinashin by declaring an option for one 50,000 DWT MR Tanker for delivery in 2H 2018. In Dry, Chengxi Shipyard in China have signed a contract for four firm 81,000 DWT Kamsarmax Bulk Carriers with Korea Line Corporation. The quartet will be delivered from 2019 and into 2020. Whilst understood to be concluded some time ago, it is now reported that Oshima Shipbuilding have secured an order for two 62,000 DWT Ultramaxes from Taiwan Navigation for delivery within 2019”, Clarkson Platou Hellas concluded.
Meanwhile, in the S&P Market, 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 was a considerable switch in market conditions, with reported activity noting a significant boost especially in the smaller product tanker sizes. However, things were not just limited to the smaller product tankers this time around, with a number of larger crude oil carriers changing hands and showing a slight upward correction in their respective prices in the process. This long pause that had been noted in these larger sizes seems to have been interrupted now, while we may well see this trend continue despite the fact that nothing notable has been seen in the freight market”, said the shipbroker.
In a separate note VesselsValue said that “tanker values have remained stable. The VLCC Front Scilla (302,600 DWT, Kawasaki, Mar 2000) sold for USD 21.5 mil to Nestol. The Suezmaxes Agean Fighter & Miracle (159,000 DWT, Jun 2017, Hyundai HI) were sold en bloc for USD 112 mil from Arcadia Shipmanagement to Olympic Shipping and Management SA.
Advantage Tankers acquired 5 MR1 (Chemical / Product) tankers in an en bloc deal worth USD 60 mil. Interorient offloaded the Baltic Ambition, Faith, Merchant, Force & Marshall (37,000 – 37,300 DWT, Jan – Dec 2006, Hyundai Mipo)”.
VV added that in the bulker segment, “values have softened a small amount this week. The Capesize Triton Condor (180,300 DWT, Oct 2009, Koyo Dock) sold to Navios Maritime Partners LP for USD 28.3 mil vs VV 28.88 mil softening values.
The Supramax BC Fujisuka (52,500 DWT, Jan 2005, Tadotsu Tsuneishi) sold from Kambara Kisen for USD 9 mil vs VV 9.55 mil softening Supramax values. Older Supramax values firmed slightly this week due to the sale of Tai Harmony (51,000 DWT, Mar 2001, Oshima) at USD 6.7 mil vs VV USD 6.22 mil. The Open Hatch Handy Bulker CS Ocean (32,300 DWT, Jan 2008, Kanda) sold for USD 8.5 mil to Tide Line Inc.”, the ship valuations expert concluded.
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Source: Clarkson Platou Hellas, VesselsValue, Allied Shipping
