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Newbuilding Orders Are Booming, Reaching 13-year Highs

A rapidly improving sentiment among owners has prompted the most active first quarter of the last 13 years, when it comes to newbuilding orders. In its latest weekly report, shipbroker Banchero Costa commented this week that “the newbuilding boom has now resulted in the most vessels ordered in a first quarter for the major trading types in 13 years. The big three countries (Japan, South Korea, and China) have a three-year minimum delivery time. H-Line Shipping ordered 2 x 210,000 dwt Ore carriers at Qingdao Beihai for delivery late 2023/early 2024 at $67 million. Vessels have been given out TC for a 10-year charter to Rio Tinto in Australia, with the option of an extension. Australia and China trade in iron ore. Option three allows for a total order of six vessels in series. Eastern Pacific ordered three 210,000 dwt ore carriers from New Times for $67 million for delivery in late 2023 or early 2024 for the same tender. Adnoc Logistics & Services has ordered 1 x 320,000 dwt from Daewoo for delivery in April 2023 for $85.1 million. Four vessels are now on order as a result of the option being exercised. The shipping division of Abu Dhabi National Oil Co. is Adnoc Logistics & Services. Chengxi awarded EGPN Bunk a $29 million order for 1 x 82,000 dwt to be delivered in August 2022”.

Source: banchero costa &c s.p.a.

In a separate note, Allied Shipbroking added that “the newbuilding dry bulk sector this past week still showed some moderate activity levels, with few but interesting businesses being reported. The orders for a total of 6+6 Capes from Far Eastern interests held main focus right now. The resuming positive momentum of this segment’s earnings, despite the recent correction noted, has certainly improved buyers’ sentiment and has increased interest for newbuilding projects.

Source: Allied Shipbroking

The slowly increasing newbuilding prices though are seemingly curbing some of this interest and this could be why we have seen only mild activity since the beginning of the year. On the tanker side, there was minimal activity once again, as sentiment here continue being severely hurt. The very low earnings, rising newbuilding prices and uninspiring outlook for the short-term are all bearish factors that have heavily affected buyers’ appetite for the time being. It is expected though that once the first signs of recovery in the market start to take shape, buyers will start to flock back to this sector. The only tanker transaction that came to light this past week was an order for 2+2 Suezmaxes. Finally, a very vivid interest is still being noted in the containership and gas markets”.

Meanwhile, things have been pretty active in the S&P market as well. Banchero Costa said that “in the dry market, six baby Capes (Arun, Ashok, Ishwari, Kishore, Sharavan/Kamlash about 106,000 dwt blt 2012/2011 STX Dalian) controlled by Essar has been sold to C.of Mittal at $81 million. A resale Kamsarmax SDTR Bella 84,000 dwt blt June 2021 Dalian has been commited to c.of Yasa at $30 million. Back in February Ursula Manx and Una Manx 82,000 dwt blt 2021 Tsuneishi Zhoushan were sold at $59 million en bloc. In the ultra-Supramax segment, Vialli 63,000 dwt blt 2015 Chengxi (BWTS fitted SS/DD due 2025/2022) was done at $21 million. Last week we reported Snowy and Emperor 63,000 dwt blt 2015 Zhejiang Zhenghou (BWTS fitted) at $19 million each. A tier II Supramax Maria 58,000 dwt blt 2011 SPP (SS/DD due 2026/2023) has gone at $15.25 million. Back in January, Asiatic and Laconic 58,000 dwt blt 2012 SPP were sold at $11.5 million en bloc. In the Handy segment, a Japanese controlled unit Alam Sinar 36,000 dwt blt 2014 Shikoku (SS/DD due 2024/2021) has been sold at $14.9 million. Furthermore, two Handy bc Pacific 05 and Pacific 06 34,000dwt blt 2009/10 Samjin were sold en bloc at $18 million, last year vessels were purchased by Vietnamese owners at $115 million.

Source: banchero costa &c s.p.a.

In the tanker segment, a strong appetite was registered especially for LR2 and Aframaxes. 6x modern scrubber fitted LR2 contracted by Maersk (Maersk Selma, Maersk Simone, Maersk Silvia, Maersk Sara, Maersk Scarlett 115,000 dwt blt 2021 and Maersk Sandra 115,000 dwt blt 2020 Dalian) were purchased by c.of ADNOC at $51.5 million each. Furthermore, c. of SOCAR has committed 3 x LR2 Nissos Schinoussa, Nissos Therassia and Nissos Heraclea 115,000 dwt blt 2015 Hyundai Heavy (BWTS fitted SS/DD passed) at $ 40 million each and a Japanese controlled LR2 Champion Prosperity 115,000 dwt blt 2009 Sasebo (BWTS fitted and uncoiled) has been sold at $19.4 million to Greek buyers. In the product segment, a modern MR2 Nord Valiant 50,000 dwt blt 2016 Hyundai Vinashin (BWTS fitted) has been sold to c. of Dee4 Capital at $26.5 million and a vitage MR Torm Carina 46,000 dwt blt 2003 STX was reported at $9 million. Back in February, Undine 46,000 dwt blt 2004 Iwagi was reported at $9.75 million”.

Similarly, Allied added that “on the dry bulk side, it seems that overall activity returned back on a “strong” momentum, in line with what was being noted some weeks back. This came somehow inline, with the positive movement in freight earnings as of late (just after a small period of corrections).

Source: Allied Shipbroking

It is true that the hefty rally in asset price levels since the early part of the year has created a more sluggish tone in activity, given that many interested parties have adopted a “wait and see” attitude. Notwithstanding this, given the general bullish sentiment, we can expect this firm trend ramp up once again during the coming weeks. On the tankers side, it was another firm week in terms of activity being noted, with asset prices being also on an upward path. This seems rather disconnected at this point with the current earnings being noted. It is yet to be seen, whether this trend of late is derived from a solid positive outlook, or if it is just a temporary overenthusiasm mostly driven by the low prices still being held”, the shipbroker concluded.

Nikos Roussanoglou, Hellenic Shipping News Worldwide

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