For those brave enough to seek out bargains, the January sales at Chinese shipyards offer incredible deals. Ordering as the Baltic Dry Index looks set to crash below the 400-mark is, of course, not for the faint hearted, but prices on offer right now are perhaps at once-in-a-generation lows.
Liu Xunxiang, general manager of the China Newbuilding Price Index Company, said that his index hit a record low last month and the outlook for 2016 is not at all optimistic.
The CNPI, founded in 2011, tracks Chinese newbuild prices from 18 shipbrokers around the world.
The last time prices had dropped to a very low level on the CNPI was back at the end of 2012, but the drop was slow and the recovery solid afterwards, Liu recounts.
"This time the recession might take even longer," Liu says.
Dry bulk vessels are suffering the worst, he says, falling in tandem with the BDI's record plunge.
"40% of Chinese shipyards' bulker deliveries were delayed in 2015, and that percentage might be increased in 2016," Liu says.
Containership and tanker prices are unlikely to see much of an uptick in prices at Chinese yards this year either, Liu reckons. However, he reckons the depreciation of the renminbi and IMO's Tier III emission standards might help stabilise prices later in the year.
Commenting on the pricing outlook, Martin Rowe from Clarkson's Hong Kong office, said, "The bulker newbuild market will be very difficult for Chinese shipyards in 2016. A lot of owners are looking to sell their vessels to be delivered in 2016 and those that have already been delivered in 2015. Of course, the selling prices would be much lower than the newbuild prices offered by the shipyards."
Feeder containerships are looking positive at the moment, Rowe reckons, although this is not necessarily reflected in the charter rates.
"It might be smart to order now, but there's not enough equity in the market," Rowe concludes.