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Shipbrokers Expect More Newbuilding Orders in the Product Tanker Segment

The slump of newbuilding orders during the first quarter of 2019 is expected to hold firm in the months to come, with a few exceptions, like for instance LNG carriers and possibly product tankers as well, on the back of improving market conditions. In its latest weekly report, Allied Shipbroking said that “activity in the newbuilding market remained subdued for another week. The dry bulk market was seeing the effects of the recent freight market developments having heavily weighted in a negative way against the interest of owners for new vessels. Given the poor current market fundamentals and minimal convincing signs showing that demand levels will rebound soon, it is not expected that we will see activity rebounding in the near term. Additionally, current price levels offered by shipbuilders are not helping boost interest, especially given the fact that there is still a fair amount of opportunity present in the secondhand market now. On the tankers side, there was an interesting turn up last week, with new emerging that New Times won two contracts for 4 LR2 and 10 MR carriers. The positive outlook currently prevailing for the product tanker market is expected to lead to an ever increased appetite for new orders in this sector”.

In a separate report, shipbroker Banchero Costa added that “it was a fairly quiet week in the newbuilding market, with not much new to report for the conventional type of ships. Headlines were taken by the struggling situation and the production stop of Hanjin Subic Bay, with relevant concerns of Owners who placed orders there. In the Dry Bulk sector, more coastal business was done in Russia where a further order for 8 up to 11 vessels was placed with Krasnoye Sormovo for specific design; delivery between 2019 and November 2020. In the tanker sector, the only noticeable info regarded the order at New Times placed by Eastern Pacific for 2 x LR2; this is to replace the same order which was awarded to Hanjin Subic and then cancelled. On a different note, it was a busy week for new container business: CMA CGM firmed 5 + 5 x 15,000 TEUs in China with the first 5 units awarded to Hudong-Zhonghua and further 5 split between ASA and Jiangnan. Leasing structure may be arranged on this deal with CSSC Shipping Lease. Hundai Mipo got an order for smaller 3 x 2,500 TEUs size from local contractor KMTC for delivery end 2020 to January 2021, price reported region $35.7 mln each”.

Meanwhile, in the S&P market, Banchero Costa said that “in the dry sector, with the big tonnage struggling to find buyers at Owners’ prices, several Handysize vessels changed hands over the last week. Two seahorse 375 “ALPINE” and “SUMMIT” around 37,500 dwt 2015 built Nanjing Dongze (ice class 1C) were sold enbloc for $30 mln to undisclosed Buyers. Japanese owned “SUNLIGHT LILY” around 36,640 dwt 2012 built Shin Kochi achieved $12.35-12.50 mln range from a Greek buyer. Finally “GLOBAL PROSPERITY” around 33,700 dwt 2006 built Shin Kochi, after failing at $8.4 mln, was fixed at $8.6 mln. In the tanker sector, the Aframax “GARDENIA” around 112,000 dwt, bought as “DHT CATHY” in November 2018 at $11.9 mln, was sold to Indonesian Buyers for $13.25 mln. In the product segment, MR2 “ISOLA BIANCA” 50900 dwt 2008 SPP was sold for $15.5 mln to undisclosed buyers whilst older “PORT MOODY” 46,100 dwt 2002 STX DPP trader sold for $7.5 mln, which seems bit softer than last done “TORM AMAZON” 46,000 dwt 2002 Onomichi, which sold in excess $8 mil to Seven Islands, India. Finally two Qatari 40,000 dwt ‘wide body’ (31 m beam) MR1 “JINAN” and “DUKHAN” found buyers in Europe at region $8 mln each”.

Similarly, Allied Shipbroking added that “on the dry bulk side, a sluggish mode is currently in effect, after a 2- week mini rally noted in terms of volume of transactions. Given the overall state of the dry bulk sector, this asymmetry and volatility in the SnP hasn’t caught many by surprise. At this point, we have witnessed a more vivid interest in the Handysize segment, with medium size segments following closely behind. Moreover, with many feeling that things are slowly recovering, we can expect buying interest to gear up again pretty soon. On the tanker side, things were sustained on the positive side, in terms of activity noted, for yet another week. This weeks volume was mainly driven by a single enbloc sale & leaseback deal. At the same time, it is important to note that buying interest is still relatively vivid and we should see a fair amount of activity take place over the coming weeks, especially in the product tanker segments which hold more optimistic views as to their future prospects”, the shipbroker concluded.


Nikos Roussanoglou, Hellenic Shipping News Worldwide

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