Dry Bulk Market Rally Triggers Newbuilding Investment Spree

Ship owners are ramping up their newbuilding ordering activity, loading up with new bulkers, as the market’s prospects appear to be quite bright once again. However, some delays could be expected. In its latest weekly report, shipbroker Banchero Costa highlighted that “many yards, particularly in China, are experiencing production difficulties as a result of equipment suppliers’ inability to obtain raw materials on time. Yasa Shipping Turkey ordered two 64,000 dwt ultramax ships from Dalian Cosco KHI (Dacks) for delivery in mid-2023 at a cost of $33.0 mln each. CDBL Leasing went to New Dayang for 6 x 60,000 dwt for delivery beginning in January 2023 and ending in January 2025 at an undisclosed level”.

In a separate note, Allied Shipbroking said that it was “an active week for the dry bulk newbuilding market, with several new orders being added to the total orderbook and the majority of these being Ultramax units. It seems that this segment has attracted the focus of buyers as of late, with the current healthy freight balance and the versatility they offer to be key drivers. 9 units were ordered by CDB Leasing last week, while another 2 orders were placed by Turkey’s Yasa shipping.

Overall ordering in the dry bulk sector has remained moderate in the year so far, despite the remarkable current freight earnings. However, interest is not subdued, with shipbuilders though offering few available slots due to their preference at the moment to retain this slots for more profitable sectors such as those of containerships and gas carriers. This is something that is unlikely to change in the near term, along with further rises being noted in newbuilding prices. On the tanker side, things were quiet for yet another week. The market continued on the uninspiring trajectory that it has held in the year so far, with minimal interest and appetite being expressed right now for newbuilding projects. Finally, more orders came through in the containership and gas sectors this past week, further increasing their respective orderbooks”.

Meanwhile, in the S&P market, Allied said that “on the dry bulk side, the SnP market returned on a strong trajectory in terms of activity taking place for yet another week. This came right on time to boost further current expectations for an interesting final quarter of the year, attuned with the existing firm buying appetite across all different asset classes. Moreover, thinking about the hefty upward movement in freight rates for the bigger size segment of late, which seemingly lagged behind slightly during the most part of the year, it is yet to be seen if we are about to experience new high levels in the market. On the tanker side, activity once again seems to have eased back, given the limited number of units changing hands. Moreover, we notice yet again that activity was skewed almost solely towards the smaller sizes. At this point, some slight recovery in terms of earnings is much needed in order to push the SnP market over to healthier levels and an improving trend”.

Banchero Costa added that “in the dry bulk market a modern newcastlemax Conrad abt 208k blt 2017 SWS (Scrubber/BWTS fitted) has been sold at $53 mln to JP Morgan. Two modern Supramaxes Stove Friend and Stove Tide abt 58k blt 2016 Tsuneishi (BWTS fitted ECO Engine) were bought en bloc at $59 mln to c. of Belships .

After offers were invited last week a Japanese controlled supramax HTC Charlie abt 57k blt 2014 Taizhou Sanfu (BWTS fitted and Tier II) has been committed at $20.45 mln back in August Atlantic Merida abt 57k blt 2012 Taizhou was reported at $16 mln. In the handy segment, a few modern units were reported during the weeks. New Face and New Days abt 38k blt 2017 Shin Kochi (BWTS fitted) gone to Greek buyers at $56 mln en bloc while New History and New Inspiration abt 36k blt 2013 Shikoku were purchased in en bloc deal by c.of Tufton at $41 mln”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide