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Limited Activity Reigns Over the Newbuilding Market

Shipyards around the world are scrambling for new orders’ intake, as more and more ship owners are refraining from committing large sums of money on newbuilding projects as a result of limited funding and the fluidity of the freight rate market amid the trade wars, which have been raging over the course of the past year or so.

In its latest weekly report, shipbroker Allied Shipbroking said that “it seems that we have entered a period of limited activity in the newbuilding market, with a mere 3 new orders being witnessed during this past week across all segments. On the dry bulk side, owners are seemingly yet to be convinced that market rebound can be sustainable in a long term. Sentiment may have improved compared to the 1Q2019, when rates slumped to historical lows, but fundamentals have not enhanced respectively to justify any speculative ordering at the current quoted prices. Given that the seasonal summer market lull is now fast approaching, we do not expected to see any important jump in activity being noted. On the tanker side, activity has slowed down lately as well, despite the positive market outlook. Last week, we noted two new orders, but all in all interest from owners has been relatively subdued, especially when compared with the 1Q2018. Buying focus seems to have shifted more so towards 2nd hand units, as the lag between order and delivery is considered a vital drawback for the newbuildings right now, with most likely feeling that they would miss out on any potential freight market upsurge expected for the last quarter of the year, as well early 2020”.

In a separate note, Banchero Costa added this week that it’s been “another very quiet week which could be read as the starting of the summer slow activity. The dry bulk market, though pulled by the Capesize lately, is not really encouraging Owners making any order of late; also tanker orderbook columns were pretty empty with the sole interesting news to report the 2+2 MR2 placed again by Golden Energy Management (related to Restis) at STX. The previous order placed in 2017 was cancelled due to shipyard’s bankruptcy. The new order is for TIER III scrubber fitted and priced at $37 mln each, delivery in about 2 years’ time. Otherwise, a few container orders were placed by XT Shipping who optioned 2 x 1,800 TEUs feeders at Hyundai Mipo and by KMTC, Korea, for 2 x 2,500 TEUs at the same yard”, the shipbroker said.

Meanwhile, in the S&P market, Banchero Costa added that “in the Dry market, two resale Post-Panamax built at Tsuneishi Zhoushan were sold to European at $34 mln each. Furthmore after sale last week of “Royal Maybach” around 93k dwt 2010 built Yangfan, another 2010 Chinese built Post-Panamax was reported sold, the “Ocean Ruby” around 92.5k dwt 2010 built COSCO Dalian done at $13.2 mln. In the Supramax segment, a Dolphin57 “Suse” around 2011 Jiangsu Hantong controlled by German administrator was sold at $10.8 mln, last Dolpin57 reported was the “Vil Baltic” around 57k dwt 2010 built Qingshan at $9.85 mln. A vintage Handymax “Star Masaya” around 42k dwt built 1998 IHI was sold at $4.2 mln. Two weeks ago “Blue Balance” around 45k dwt 1998 built Tsuneishi was done at $4.8 mln. In the tanker market, some movements were recorded in the product segment. A Formosa controlled vessel “FPMC 21” around 50k dwt 2009 built STX was purchased by Greek buyers at $14.5 mln. Vessel had SS/DD due and she is partly zinc coated. Furthermore two 2010 built MR “Atlantic Pegasus” and “Atlantic Queen” were sold at $20 mln each in an en bloc deal”.

Similarly, Allied commented that “on the dry bulk side, a modest flow of transactions took place the past couple of days, sustaining at the same time the bullish sentiment of late towards the market. Once again, dry bulk SnP market is monopolized by medium size units, reflecting (at least to some degree), the strong appetite for this vessel designs. Moreover, given the recent trends from the side of earnings, we may well expect an interesting secondhand market the upcoming months. On the tanker side, a considerable boost in terms of volume was noted during this past week. The fact that we should mention here is that we finally witnessed some focus shifting (even if it is for a brief moment) towards units of different size segment other than that of the MRs. Furthermore, given the good sentiment in terms of future returns that is currently being portrayed, we can anticipate a rather vivid market to continue during the weeks ahead”, Allied concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

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