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Low Newbuilding Prices Start to Lure in More Ship Owners

24.04.2017 | 14:55

The allure of low pricing, as opposed to the increasingly expensive second hand ships, is starting to prove hard to ignore by more and more shipowners, particularly cash-rich ones. In its latest weekly report, shipbroker Allied Shipbroking noted that “the amount of interest circulating the market over the past couple of weeks has shown a remarkable recovery. It seems as though the positive sentiment from the improved freight market in the dry bulk market has over spilled here too and with secondhand prices having increased at such a fast pace, there is an increased number of buyers now looking at this option more favorably as they seek to secure in the low prices currently being quoted by shipbuilders rather then wait for the market to show improved fundamentals on the demand side. This has already started to shift the prices being quoted by most shipbuilders, while given the cash flow difficulties faced by the large majority, we could well see them increase their prices at an even faster pace if the market starts to heat up further. For the moment however, the actual number of new orders coming to light are still relatively few in number and are likely to stay as such, given that the largest majority of shipowners are steering clear from this option for the time being”, said Allied.

 

In a separate newbuilding report, shipbroker Clarkson Platou Hellas said that “there is one tanker order to report for previous week, with DSME signing a contract for three firm 318,000 DWT VLCCs from Clients of Maran Tankers. It is understood that the deliveries for the three units will be from the later part of 2018. In Dry, Clients of Chartworld Shipping have placed another Kamsarmax order by signing a contract for four firm 82,000 DWT Kamsarmaxes with Penglai Jinglu Shipyard in China for delivery in 2018 and 2019. The Owners already have placed an order for four firm 82,000 DWT Kamsarmaxes at Jiangsu New Yangzijiang earlier this year. It came to light this week that Torvald Klaveness have extended their series at Jiangsu New Yangzijiang for one 83,563 DWT Kamsarmax for delivery in 4Q 2018. In the Gas market, Solvang ASA have added two 21,000 CBM Ethylene/LPG Carriers in their orderbook at Hyundai Mipo Dockyard by declaring an option. The duo are set for delivery in 2Q and 3Q 2019, respectively. Finally in the Passenger / Cruise market, Viking Line have announced an order for one firm plus one optional 63,000 GT Passenger/Car Ferries at Xiamen Shipyard. The firm vessel will deliver within 2020 and will be able to accommodate 2,800 passengers. Eastern Shipbuilding Group in the US have received an order for three firm 4,570 GT Passenger Ferries from The City of New York Department of Transportation (NYCDOT). Delivering in 2019, the vessels will be able to carry 4,500 passengers between Staten Island and Lower Manhattan”, Clarkson Platou Hellas concluded.

Meanwhile, in its latest note, ship valuations’ specialist, VesselsValue said that in the dry bulk market, “despite many sales in the bulker sector this week, values remained relatively constant. The Panamax vessels Libertas and Imperial (75,500 DWT, Aug/Oct 2007, STX Offshore) sold en bloc for USD 27.0 mil to Navios Maritime Partners. The Supramax Casta Diva (52,400 DWT, Mar 2006, Tsuneishi Cebu) was sold by Kambara Kisen for USD 9.6 million. Ultramax vessels: JS Amazon, JS Colorado, JS Danube, JS Sanaga, JS Columbia (63,500 DWT, Mar/Mar/Apr 2012, Aug 2013, Apr 2015, Dayang Shipbuilding Co) sold en bloc for USD 85.4 mil to JP Morgan. Handy Bulker values remain stable with the sale of Jin Yu (38,500 DWT, Jun 2012, Naikai) to Inui Global Logistics for USD 15.0 mil vs VV value USD 15.1 million”, said VV.

 

In its own S&P analysis, Allied noted that “on the dry bulk side, activity continues to keep pace, with further prices now being noted across most size and age groups. With the buying frenzy having taken hold of the majority of the market, we are seeing a greater rush to secure the higher spec units that do emerge as sales candidates, while sellers are still holding back their units as they have started to feel that delaying the decision to sell by only a few weeks could fetch a considerable gain. On the tanker side, things have started to look slightly more promising despite the fact that activity still remains limited at this point. The number of available sales candidates circulating the market at this point is minimal, while the fact that we have gone through the first quarter of the year, with activity still remaining fairly buoyant and rates having held to considerably good overall levels has created a renewed confidence amongst buyers albeit only a marginal one”, the shipbroker concluded.

 

Source: http://bit.ly/2omFaQu


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