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Newbuilding and S&P Markets Yet to Pick Up in 2019

As is usually the case so early in the year, ship owners are still reluctant to commit funds to newbuildings or S&P deals, unless some opportunity arises, or there’s a very specific and urgent need to do business.

In its latest weekly report, shipbroker Allied Shipbroking said that in the newbuilding market, “activity this week remained at low levels in the dry bulk segment, in sharp contrast to the week prior where several deals were recorded. Interest for newbuildings remains strong, as the sentiment that prevails in the market right now continues to be positive. However, the optimism seems to have moderated as of late, thanks to the freight market posting several losses within the last few weeks, postponing owners’ plans for adding further orders to their orderbooks. On the tanker side, activity remained at moderate levels for yet another week, with owners proceeding to place new orders in both the crude oil and product tanker segments. More specifically, this past week we witnessed two new orders for VLCCs, one for a Suezmax and a couple of orders for product tankers. More notably is that all these orders were placed at S. Korean shipbuilders. Meanwhile, as a result of the increased interest, prices have started to nudge slightly upwards this past week. The market outlook for tankers remains healthy with owners being optimistic for further increase to be noted in term of freight rates during the year. It is worth also mentioning the increase being noted in interest for LNG carriers lately, with two new orders being reported during this past week”, said Allied.

In a separate newbuilding note, Clarkson Platou Hellas said that “in Tankers this week, DSME have announced two separates new VLCC orders. The first with Sinokor Merchant Marine for four firm units of 320K dwt in size. The vessels will deliver in 2021 and are understood to have been fitted with scrubbers. DSME followed this with a separate order for two firm 300K VLCCs with Oman shipping. The delivery of these two firm vessels is understood to be within the end of 2020. HHI meanwhile announced a new Suezmax order with an unnamed European owner, for two 158K dwt Suezmax tankers, both due to deliver in 2H 2020. In Dry, Dalian Shipbuilding (DSIC) has won an order for ten wide beamed 85,000dwt Bulk carriers from domestic leasing company AVIC International Leasing. These vessels are understood to have been ordered against charter to Singaporean based SDTR and will likely be constructed at the groups Shanhaiguan facility. The vessels will deliver from 2H 2020 onwards. In gas, one small sized order to report with CSSC Guangxi announcing an order for one 5,000cbm LPG carrier with domestic owner Hainan Zhaogang Marine. This vessel is expected to be delivered in 2020”, Clarkson Platou Hellas noted.

Meanwhile, in the S&P market this week, Banchero Costa reported that “little happened on the tanker sector with a (apparently old) sale of the Suezmax “Felicity” around 157,500 dwt 2009 built Sungdong to clients of MODEC for conversion purpose at $42 mln. A sale within Greek compatriots occurred for an older Aframax, clients of Stalwart have purchased from Estoril Navigation “Blue River” around 106,000 dwt built 2002 Tsuneishi for $11.5 mil. In the Dry Bulk sector, the whole month of January was weary while waiting for the Chinese New Year. Two Ultramax vessels changed hands last week, the “Queen Cuki” around 63,700 dwt 2015 built COSCO Zhoushan was sold for $20.4 mln to clients of Eagle Bulk with some TC attached (BWTS is fitted) and the “Loch Nevis” around 61,300 dwt 2016 built Shin Kurushima, Japan, which was sold for $24.3 mln to Neptune Lines of Greece. On the Handysize segment, Chinese Development Bank purchased with TC back a pair of ‘Green Dolphin‘, the “Ninghai” around 38,800 dwt 2017 built Huanghai, China and the “Ninning” around 38,800 dwt 2017 built Huanghai, China at $ 19 mln each”, said the shipbroker.

In a separate report, Allied added that “on the dry bulk side, a modest activity was noted these past few days, with the market starting to show an upward trend. However, given the overall sluggish mode of late, the S&P market seems yet unable to sustain a stable direction for the time being. Moreover, while the freight market shows signs of easing, the most probable scenario is that we will continue to witness periodical ups and down both in terms of volume of transactions as well as fresh interest for secondhand dry bulk assets. On the tanker side, activity has slowed down a bit on a w-o-w basis, after the fairly good start to the year. Despite this, things remain overall vivid in the SnP market, with fresh interest seemingly ample at this point. Moreover, given the general positive sentiment in respect to future freight earnings, we may well continue to see a fair number of deals taking places on a rather constant basis”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

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