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Volatility Reigns in the S&P Market, as Newbuilding Orders Dry Up

The second-hand market for ships is quite volatile at the moment, as many owners are actively looking for investment opportunities, in a time when the majority of them refrain from newbuilding orders. In its latest weekly report, shipbroker Allied noted that “on the dry bulk side, we experience a rather volatile market at this point, with activity trends changing rapidly even on a weekly basis. During the past week, very few transactions came to light, a situation that put some sort of doubt in regards to the firm buying interest that was noted the weeks prior. Whether it is a temporary pause, given the recent correction in freight rates, or that the SnP market is moving towards “shallower waters”, will depend on how things unfolded during the next couple of weeks. On the tanker side, volume was kept at relatively modest levels, given the current buying appetite. At this point, interest was narrowed down to almost exclusively for vintage units, especially in the MR size segment. Given the current sentiment and while we have just under 2 months to go before the close of the year, we can expect a further flow of deals to emerge”, Allied said.

Similarly, Banchero Costa added that “in the dry bulk sector, there was nearly no activity for large units apart from a few vintage Panamax reported; the youngest was the Clio, 73,600 dwt built 2005 by Jiangnan that was reported sold to Chinese buyers for $7,4mln basis prompt delivery. The Supramax segment was more active with several sales taking place. Again the units reported are not very modern and most of them were sold with the drydock due fairly prompt which clearly influence the price. The Krania, 57,700 dwt, built 2010 by STX Dalian achieved $10,75mln from Greek buyers (SS/DD due in 2020). Another unit, a smaller Supramax, the Mary Lina, 52,450 dwt built 2007 by Tsuneishi was sold for $10,3mln to Vietnam based buyers. In the tanker segment the Phoenix Vanguard, 306,500 dwt built 2007 by Daewoo was reported sold at $41,5mln after the previous sale failed in October at $38,75mln showing quite a price correction. Another VLCC, the Astro Challenge, 299,000 dwt built 2002 by Daewoo may have been sold to MMT, the same Buyers who purchased a block of VLCC from Ridgebury Tankers. The price is understood around $32mln. In MR segment, the MR Orestes, 50,100 dwt built 2009 by SPP achieved $19,25mln from German buyers, the vessel is WBTS fitted. The older Torm Rosetta, 47,000 dwt built 2003 by Onomichi was sold for mid/high $9mln to undisclosed buyers. Another Torm’s vessel, the MR1 Torm Garonne, 37,000 dwt built 2004 by Hyundai Mipo, Ice class 1A, is rumoured sold for around $9.3mln”, Banchero Costa noted.

Meanwhile, the shipbroker noted that in the newbuilding market, “in the bulk segment there have been only 2 two orders all in the NewCastlemax segment. Polaris Shipping placed an order at Shanghai Waigaoqiao for 2 x 210,000 dwt, the delivery is set for January and March 2021. The vessels are Tier III and will be scrubber fitted. K-Line ordered a NewCastlemax, 211,000 dwt, at JMU which is set for delivery in 2021and will be TC long term to JFE Steel. The ship, scrubber fitted, has multiple fuel saving features such as Energy-saving appendages, low-wind resistance superstructure as well as the builder’s ‘leadge bow’ design, which generates a reduction to waves resistance. For tankers, Yasa ordered at Daehan 2 x 158,000 dwt Suezmax. Deliveries are set for the first quarter of 2022; the vessels will be fitted with open-loop scrubbers and the price is in the region of $61mln. In the chemical segment, 2 + 2 15,000 dwt IMO II/III tankers have been ordered by Terntank at AVIC Dingheng for delivery in 2021. The ships have been designed by Kongsberg and are Biogas/LNG powered, equipped with hybrid battery and on-shore power connection”.

Similarly, Allied added that “this was the second consecutive week that we witnessed newbuilding activity in the dry bulk sector stand at relatively active levels, with 6 new units being added to the orderbook. Interestingly enough, all orders being placed last week were from Far Eastern interests. Despite the further correction noted in the freight market, buyer’s appetite still holds at significant levels, a fact though that may change in the following weeks. On the tankers side, newbuilding activity was subdued this past week, with just one new order for 4 small tankers being placed. This does not mean that buying interest has diminished, as the oil market outlook remains positive. However, with the extensive ordering that has taken place during the year so far, it is likely that we will see a gradual slow down as we approach the end of the year. The current tanker global orderbook has reached 402 units, still behind its 2018 and 2017 figures, when the orderbook was at 505 and 538 units respectively”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

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