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Tanker Tonnage in Demand

Demand for both secondhand and newbuilding tankers has increased over the course of the past week, in what could perhaps be a sign of things to come. In its latest weekly report, shipbroker Banchero Costa noted that in the S&P market, “considering the limited number of available candidates, during the week was evidenced appetite for modern tanker tonnage. Was reported a VLCC resale hull 5476 (Owner: Sinokor) scrubber and BWTS fitted taken over by Euronav, Belgium at $93 mln with delivery 2021. A 2014 VLCC ‘Miltiades Junior’ owned in Greece was sold on private basis to possibly clients of Petredec, Singapore at $ 69 mln. Two Aframax tankers sisterships 104,000 dwt built in 2008 by SWS namely “Olimpic Sea” and “Olimpic Sky”, were rumoured to be on subs with Advantage Tankers at $21.5 mln each. Finally two MR1 tankers 40,000 dwt “Inyala” and “Rhino” built in 2008 and 2010 were sold to undisclosed buyers at $13 mln and $15 mln respectively. In the dry segment, Oman Shipping took over one Scorpio owned Ultramax unit “TR Omaha“ 63,500 dwt built in 2014 at Hantong at $17.5 mil. Handysize bulkers prices kept on softening: mv “Arrilah-I” 37,000 dwt built in 2011 at Hyundai Mipo was sold for $8.75 mln whilst another Handysize “Baltic Wind” 35,000 dwt built in 2009 at SPP, S. Korea was sold for $7.75 mln to Turkish buyers (SS passed and BWTS fitted).

Source: Banchero Costa

 

Similarly, Allied Shipbroking added that ‘activity on the dry bulk side returned to subdued levels last week. The lack of interest from buyers, especially for the bigger sizes and the refusal by sellers to sell at a considerable discounted have retained transactions at low levels. Last week, we witnessed just 4 units being sold, with the majority of them being Handysize and Handymax units. Given the negative global economic prospects being expressed right now and the resilient second-hand prices, it is likely buyers will remain distant in the coming weeks. On the tankers side, it was a much more active week, with a fair number of deals being reported across the whole band of size classes. Despite the current slump in freight rates, the outlook remains positive, driving further keen interest amongst buyers. The fact that second-hand prices remain significantly discounted compared to newbuildings, gives the extra edge here and thus we expect activity to remain robust over the following weeks.

 

Meanwhile, in the newbuilding market this week, Banchero Costa noted that there were “no orders in the dry-bulk segment registered during the week. In the wet sector, Eastern Pacific commissioned to SWS the construction of 2 x 158,000 dwt Suezmax: the price is not known and the duet will be delivered in 2022. Big order coming from AET Inc. to Samsung for the construction of 3 x 152,000 dwt shuttle tankers. The trio will have a cost of $ 104.83 mln per vessel and once delivered between December 2022 and June 2023, the vessels will go on a 15-year time charter to Petrobas. AET Inc. has already ordered shuttle tankers to Samsung in 2018 and at that time the price amounted to $ 91 mln. SC Shipping ordered to Fukuoka 2 x 19,000 dwt product carriers which will be delivered in the second half of 2021. The cost of the two vessels remains undisclosed”.

Source: Banchero Costa

In a separate note, Allied Shipbroking added that “interest for new newbuilding orders returned this past week for tankers. We noticed several new contracts being signed with the majority of them referring to Suezmax units, which seems to have convinced investors as to their positive market outlook. With a contracting to fleet ratio below 6% over the past 5 years (including 2020 YTD) and optimistic demand forecasts, a positive stance for the segment has seemingly started to take shape. This means that we may see further spending in this segment in the near future. However, with 71 units already in the orderbook, some second thoughts may be seen during the latter part of the year. Smaller sized tankers were also on the ordering menu last week, mirroring a gradual return of confidence.

Source: Allied

On the dry bulk front, things were not as positive last week, as we saw just one new order being placed. The fact that fundamentals are remaining poor, even if freight rates have improved (with exception of Capesize), has continued to curb buying interest. We expect investments to gradually return, as most market participants remain reluctant due to the prevailing short-term prospects being shared for this sector”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

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