Ship Owners Turn to Second Hand Bulkers, Instead of Newbuildings

Ship owners have reverted to their year-old “habit” of opting for second hand dry bulk carriers, instead of newbuildings. In its latest weekly report, shipbroker Allied said that it was “a week with limited interest in the dry bulk newbuilding market, with just one fresh transaction taking place, a trend that is likely to hold as we are reach closer to the year’s close. This came as a continuation to the subdued action that we had noted in the year so far. Compared to the number of new contracts that were reported last year, interest seems to have been minimal this year, mainly due to the overall uncertainty that prevailed in 2020. The volatility seen in freight earnings and the uninspiring demand-supply balance noted during most of the year, have all helped in trimming investment appetite. We expect interest to slowly start to revive, in line with the global economy during 2021. On the tankers side of things, despite the discouraging environment that has been shaped as of late, last week we noted a series of fresh new orders across different size segments taking place. In the last few weeks, we saw some signs of a rebound in interest from buyers, but we do not expect any significant shift in the overall trend to take shape any time soon, as fundamentals for the time being remain far from attractive. However, given that demand–supply balance is anticipated to improve over the coming months, it may well fuel some investment interest”, Allied Shipbroking said.

In a separate note, Banchero Costa added that “Everest Venture Capital China placed a Newbuilding order for 7 x 300,000 dwt VLCC units at Hyundai Heavy (South Korea) for dely from 2nd half 2022 until August 2023; furthermore, they placed orders for 3 x 300,000 dwt units at Samho Heavy (South Korea) for dely from 2nd half 2022 until August 2023 at a level of $85 mln per unit: all vessels will be scrubber fitted and built to high specifications. Latsco Shipping ordered 2 x 300,000 dwt VLCC scrubber fitted units at Hyundai Heavy for dely 6- 9/2022 at $89.3 mln per unit. Centrofin Greece placed an order at Samsung for 3 + 2 157,000 dwt Suezmax units (scrubber fitted) for dely within 4Q 2022 and 1Q 2023 at level of $58.2 mln per unit”.

Meanwhile, in the S&P market, Allied Shipbroking said that “on the dry bulk side, a very strong week was noted in terms of activity, despite the slight slowdown seen just the week prior. The good momentum and buying appetite now seems “abundant” in the SnP market for the time being, especially when given the slight support coming from the side of earnings. Interest for dry units lacks any given direction, given the considerable number of units changing hands across all different size segments and age groups. All-in-all, as we are just few weeks away from the year’s close, we can expect this robust volume to be sustained in the near term. On the tankers side, a good flow of transactions was due the past week. This can be seen as a mere reflection of a very firm MR market, with buying appetite seemingly ample at this point. Bigger size segments have witnessed a rather sluggish mood, relatively attuned with the uninspiring freight market. Given the current state of play, these trends look likely to follow us through till the year’s close”.