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Maritime: Ship Owners to Snap Up Bulkers in The Newbuilding Market - Richard Oyamo reports

Updated: Apr 30, 2021

According to the weekly report by the shipbroker Allied Shipbroking, ship owners are significantly contracting more bulkers in the newbuilding market. This is confirmed by the report from Allied Shipbroking stating that the newbuilding market has seen a few dry bulks transactions. However, there are some interesting trends behind the transactions. For instance, the week has witnessed the order of 5+5 Kamsarmaxes by Nisshin Shipping, although many buyers had no interest in it for years.


Although the freight rates have shown positive changes for the past few months, buyers are still afraid to place their orders. However, the newbuilding market is expected to see more buyers as the persistent earnings keep growing. This is contrary to the tanker market where the freight levels keep trimming buyers’ interests. This does not mean that the sector will completely diminish as many still believe the tanker market will bounce back later in the year. Of course, there have been a few orders seen in the past week, with interest being shared among the crude oil and petroleum products sectors.


Shipbroker Banchero Costa said that Euronav ordered 2+1 VLCC (approximately 300,000) from Hyundai Samho in the tanker market, to be delivered between the end of 2022 and 1Q 2023. Moreover, Sonangol exercised an option for two more Suezmaxes (160k dwt) each costing $61 million. This is after placing two orders earlier. C of Enesel in China has further ordered two and one optional Aframax Tanker from SWS to be delivered in 2023, costing $52 million each.


C. of Avin has also placed an optional order of the third Suezmax containing ammonia at Newtimes Shipyard to be delivered in the second quarter of 2023. On the other hand, C. of CGM ordered six plus six optional 13,000 TEU container vessels from Jiangnan and Hudong Zhonghua suppliers, each costing between $140 and $145 million. This marks to be the busiest week for the tanker market, where buyers can increase the vessel capacity to 15,000 TEU while bunker LNG tanks can be fitted on the deck for dual fuel. All the vessels are expected to be delivered from 2024.


C. of Briese Scifffahrts ordered for four 1,900 TEU feeders from Huangpu Wenchong to be delivered in 2023. Additionally, in the dry market, Japanese Nisshin Kaiun ordered five plus five optional Kamsarmaxes from Jiangsu Hantong costing $27 million each to be delivered in June 2022. Allied Shipbroking added that the dry bulk transactions in the S&P market were quieter for the past week considering the current situation. However, the buyers' interest in different types of vessels remains stable and is likely to rise keeping the S&P volumes higher. Not forgetting it has also been a fruitful week for the tankers with notable activities.


The expectations


From this data, it is quite evident that both the tanker and newbuilding markets will experience a drastic increase in transactions for the coming weeks. This is because the market has seen overall buying interest in all shipping sectors, with the current momentum suggesting there will be sustained transactions ahead.


(Editor: Richard Oyamo)