Newbuilding Market on “Freeze Mode”, But S&P Transactions Higher
With the freight rate market in dire straits, ship owners have turned their attentions on finding investment opportunities in the S&P market. In its latest weekly report, shipbroker Allied Shipbroking said that “the current distressed conditions noted in the freight market have left little room for any optimism to be held that could help boost newbuilding activity anytime soon. Earnings below OPEX levels and severely hurt sentiment have curbed interest even amongst the biggest risk-taking investors. Meanwhile, the fact that prices have not posted any decline yet despite the negative investment atmosphere is also playing its part on the current limited activity trend. Despite all these, we witnessed some fresh activity this past week, with 8 new dry bulk and 2 tanker units being added to the global orderbook. Given the current situation and the fact that there is no sign of any improvement shift in the near term, we expect buying appetite to remain reduced over the coming weeks. At the same time, it will be interesting to see if shipbuilders will find room to further drop their margins and offer more competitive prices over the coming months”.
In a separate note however, Banchero Costa said that “the week was fairly active for newbuilding orders:Tsuneishi Cebu received an order of 4 x 42,000 dwt bulk carriers. It is not clear whether it will be for its own account and future resale or not. In the gas segment Hyundai received an order for 3 x 82,000 cbm LPG carriers with delivery set for 2021 and 2022. The buyer apparently is Phoenix Tankers. In the wet segment Dynacom kept booking slots for crude carriers ordering 2 x 300,000 dwt VLCC at New Times with a price around $96 mln per vessel and deliveries set for March and September 2022. AEK Tankers placed an order to Samsung for a Suezmax shuttle tanker with dynamic positioning for $91mln, dely expected in June 2022. A significant order was placed by Knutsen NYK Offshore Tankers to Daewoo for 2 x 124,000 dwt very sophisticated shuttle tankers with delivery in June and September 2022. The price reported for each vessel is $141 mln and will be chartered to ENI for 10 years. The vessels will be able to burn LNG, will have dynamic positioning and will be fitted with batteries”.
Meanwhile, in the S&P market this week, Allied Shipbroking said that “on the dry bulk side, a fair volume of transactions came to light for yet another week, with a good number of units changing hands (especially for the bigger size segments). The good momentum in terms of total activity during the past couple of weeks or so is still surprising, given the very pessimistic atmosphere noted from the side of earnings, as well as from the notable commercial hurdles that have been put up by the virus outbreak. We do however see a slow shift in buying interest, with most now looking to focus more on any bargain deals that may emerge rather than face current price levels. On the tankers side, a slight correction in total volume was noted during the past week. This came rather attuned with the downward correction in freight rates noted of late. Witnessing this hefty negative pressure from the side of earnings, it is yet to be seen if we experience a similarly pessimistic trajectory on the overall sentiment and buying appetite during the coming weeks”, the shipbroker said.
Banchero Costa added that “it was a quiet week in the secondhand market: nevertheless the Capesize “Shinyo Alliance” 176,000 dwt built in 2005 by Universal will be changing hands soon and it will be sold to South Korean buyers for $14 mln. The Supramax “Novo Mesto” 53,600 dwt built in 2005 at Sinopacific was sold to Indonesian buyers for $6.3 mln (SS/DD due). In the wet market the Suezmax “SKS Saluda” 158,000 dwt built in 2003 received several inspection requests and now she will may be sold somewhere between $21/22 mln. Handy tankers “Cape Beira” 40,000 dwt built in 2005 at ShinA and “Ridgebury Nalini D” 37,000 dwt built in 2008 at Hyundai Mipo were sold respectively to Nigerian and European buyers for $10.35 mln and $13.50 mln”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide