Newbuilding Orders Dry Out, But Investment in Second Hand Tonnage Still Rather Active

Public holidays in China and S. Korea have eroded investment appetite in the newbuilding market over the course of the past week. In its latest weekly report, shipbroker Allied Shipbroking said that “it was another week with limited interest from potential buyers for newbuilding projects in both the dry bulk and tanker segments. On the dry bulk side, we have recently witnessed a decline in appetite despite the more competitive newbuilding price levels that have been noted as of late. In the year so far, we have seen 81 units being added to the orderbook, which right now stands at a total of 603. This is much less than the 116 units that had been ordered during the same 9 month period last year. It seems that the discount of second-hand units is still attractive in the eyes of potential buyers and thus fresh enquiries remain scarce. In the tanker market, the lack of fresh interest is persisting for now, as market fundamentals have not yet the negative trend they entered into during the 3rd quarter. The number of new orders being placed in the year so far has amounted to 97, a figure much lower compared to the 123 units that had been ordered in the same period last year. We do not expect this trend to change significantly during the final quarter of the year, as sentiment has been hurt considerably as of late”.

According to a separate note from Banchero Costa, “due to public holidays in China and S Korea activity was certainly limited. A joint venture namely West Africa LPG, between Nigerian National Petroleum Co. and Ocean Bed Trading of Nigeria, placed an order for 2 x firm LPG carriers of 23,000 cbm at Hyundai Mipo, S. Korea at the price of $38.4 mln apiece for delivery July and September 2022. For what concern other segments, were confirmed orders for 3 x Capesize bulk carriers 182,000 dwt: two units to be built by JMU (Japan Marine United) and the other one by Namura for delivery over 2021 the former two and May 2022 the latter. The contractor is not known yet. Finally, Scotline, UK went to Netherlands based Royal Bodewes Shipyard for their second multipurpose carrier 4,800 dwt type which will be delivered in November 2021. The Vessels will have hybrid propulsion installed utilising an MaK engine and batteries which may be charged from shore”.

 

Meanwhile, in the second hand market, Allied said that “on the dry bulk side, the positive momentum was sustained for yet another week, given the relatively modest flow of fresh transactions taking place. At this point, the boost is more apparent in the bigger sizes and especially in the Capesize segment, in line somehow with the general steep upward path from the side of realized returns. Given now that we are already due the final quarter of the year, with many taking a bullish stand, we can anticipate a rather vivid SnP the coming months. On the tankers side, another strong week in terms of activity noted was due. Given the prolonged uninspiring trend noted from the side of earnings, this trend of late on the SnP side might well catch many by surprise. Once again, we witnessed a firm presence from the bigger size segment, given the good number of units changing hands. With all other sizes showing some slight movement, we can expect a robust flow of fresh deals coming to light (in the near term at least)”.

According to Banchero Costa, “during the week, two Japanese controlled Capesize were reported sold: Pacific Endurance 181,000 dwt built in 2011 at Koyo was sold at $19.4 mln to Greek Buyers and Royal Accord 180,000 dwt built in 2009 at Imabari was done at $18.5 mln to client of Golden Union. After the sales of Sbi Sousta and Sbi Rock, another Kamsarmax was disposed by Scorpio: it was the Sbi Conga 82,000 dwt built in 2015 at Hudong that was sold at $18.4 mln (which was more or less in line with the sale of the sisters). ADNOC was reported to be behind the sale of Isabelle Manx 64,000 dwt built in 2018 at Tsuneishi Zhoushan that was sold at $25.8 mln. Few weeks earlier, Adventure III 62,000 dwt built in 2019 at Oshima was reported at $24.25 mln. In the Handysize segment, Queen Anatolia 28,000 dwt built in 1996 at Imabari was reported at $2.95 mln, few weeks back Unico Anna 28,000 dwt built in 2000 was done at $3.2 mln. In the tanker sector, after offers were invited during the week to Japanese controlled Aframax Champion Princess 105,000 dwt built in 2012 at Hyundai was sold at $26.4 mln to client of GESCO. Back in March, Nanyang Star 104,000 dwt built in 2012 at Sumitomo was done at $32.5 mln. In the product tanker segment, Nord Integrity 47,000 dwt built in 2010 by Iwagi was reported at $16.2 mln basis SS/DD passed and BWTS fitted. Nord Sakura 46,000 dwt built in 2012 at Shin Kurushima was done at $16.5 mln”, the shipbroker concluded.

Nikos Roussanoglou, Hellenic Shipping News Worldwide