Activity in newbuilding orders seems to have slowed down a bit, compared to the past few weeks, but deals are still being done. In its latest weekly report, shipbroker Intermodal said that “if there is one thing that has constantly exceeded expectations so far this year this is newbuilding activity. The number of recent orders reported last week still shows healthy contracting activity in the sector, with the dry bulkers attracting most of the investment interest out there and perfectly aligning with the trend in the second-hand market. Most of the dry bulk orders still concern vessels of bigger tonnage, with Kamsarmax and Newcastlemaxes being the most popular lately. The revived love for dry bulk newbuildings has undeniably been supporting Chinese yards that still constitute the most popular destination for orders in the sector and that have been struggling to survive amidst the significant slowdown in dry bulk ordering in the past couple of years. Let’s not forget that Chinese yards back in 2015 secured around 36% of all orders confirmed then, while this percentage is estimated at around 26% in 2016 and 27%ytd. In terms of recently reported deals, German owner, Oldendorff Carriers, placed an order for three firm Ultramax bulkers (61,000 dwt) at NACKS, in China for a price in the region of $24.8m and delivery set in 2019”, Intermodal said.
In a separate report, Allied Shipbroking said that “after a week of poor activity in the newbuilding market, many people have been left with questions and uncertainty in terms of what to expect next. With the dry sector taking the lead again and leaving at the same time activity in the tanker side lagging behind, a healthier flow of new ordering has been created, keeping things very interesting in that respect. The main concerns on the other side, the tanker segment, has seen much uncertainty along with tight earnings which have hampered potential investment opportunities that might be in the works. On the other hand, with the freight market in the dry bulk segment showing signs of continued strength and resisting any significant downward movements, we should see in the coming weeks prices firming for modern second-hand sale units. If this trend is strong enough it should in turn push owners to return to the yards if they see second hand units as too costly and not worth the premium of having the asset now”.
Meanwhile, according to Clarkson Platou Hellas, “in Tankers, only one order to report this week with Hyundai Mipo Dockyard (HMD) taking an order from Clients of Central Shipping Monaco for one firm plus one optional 50,000 DWT MR Product Tanker. These will be built from HMD’s Ulsan facility and the firm vessel will be delivered in 1Q 2019. In Dry, Clients of Golden Ocean Group have ordered two firm plus two optional 208,000 DWT Newcastlemaxes at New Times Shipbuilding in China. The two firm units are set for delivery within 2019. For Kamsarmax, Clients of Tomini Shipping have signed a contract for three firm units with Taizhou Kouan for delivery in 2019. More Kamsarmax orders were there for Taizhou Kouan from Clients of. Aquavita International in Ukraine who has also placed an order for one firm plus one optional unit at Taizhou Kouan, which are slated for delivery within 2020”, the shipbroker concluded.
In the S&P market this week, Allied Shipbroking said that “this past week we have witnessed a greater volume of dry bulk sales compared to other segments, with a stronger preference for older vintage units over modern ones. We expect prices for modern second hand units to hold their values due in part to most owners not being sellers in this firming freight market, while owners of recently acquired tonnage looking to be more likely candidates as sellers, especially if they purchased these assets back in 2016. On the tanker front we expect the lack of sales to be partially due to the deteriorating freight market. Its very likely that most owners are reluctant to come down to buyer’s levels and thus we have not seen many transactions concluded. We expect the second hand tanker market to continue to falter for the next few months, until the oil market starts to show a more bullish face which should rekindle the freight market. With this being said, the only tankers reported sold this week were two small chemical tankers”, the shipbroker concluded.