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Tuesday, December 10th, 2019

Newbuilding prices hold firm despite increasing pressure

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by November 30, 2016 General

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Despite the fact that shipyards are closing left and right on a lack of newbuilding contracting activity, while even the biggest “names” are reeling under the pressure, prices are still holding their ground. In its latest weekly report, shipbroker Allied Shipbroking said that “there is still no shift on the price front despite the ever growing pressure being placed on shipbuilders. New orders continue to be few and far between and the way the orderbook to fleet ratio is going it looks as though we will start to see ever more shipbuilders being under increasing pressure by their financiers and investors as their operations reach or even in some cases drop below minimal operational volume. What is more worrisome for shipbuilders is that without the ability to offer a substantial discount on prices compared to what they are offering today it will continue to be hard to entice new buyers and compete with the secondhand market. This will be the case even if we see notable price increases in in markets such as those of the dry bulk secondhand market”, said Allied Shipbroking.

Meanwhile, in the S&P market, ship valuations specialist VesselsValue said that in the tanker market, values have remained stable versus the past week. “Aframax tankers the British Merlin (114,800 DWT, 2003, Samsung) and British Curlew (114,800 DWT, 2004, Samsung) were sold by BP in an en bloc deal for USD 29.2 mil, VV value USD 29.53 mil causing a slight softening in values”, VV said. Similarly, on the dry bulk market, Capesize and Panamax values have remained stable over the past week. According to VV, “Capesize vessel the Bulk Singapore (177,200 DWT, 2005, Namura) was sold by Celeste Holding Pte for USD 12 mil, VV value USD 11.13 mil causing a firming in values. 6 Supramax sales took place this week causing a softening in values. The K Coral and K Amber (58,000 DWT, 2010, Dayang Shipbuilding Co) we sold by SK Shipping for USD 8.7 mil and USD 8.3 mil respectively. VV valued the vessels USD 9.58 mil and USD 9.57 mil respectively. Indigo Spera (56,100 DWT, 2011, Mitsui Ichihara) sold for USD 12.9 mil, VV value USD 13.82 mil.

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Jupiter (57,000 DWT, 2008, Jiangsu Hantong Ship Heavy Ind) sold for USD 6.5 mil, VV value USD 7.98 mil. RHL Catalina (53,600 DWT, 2002, Iwagi Zosen) sold USD 4.8 mil, VV value USD 5.51 mil. Handy values have seen a firming in values for older tonnage due to the sales of the Sider Caribe (32,300 DWT, 2009, Kanda) sold for USD 8.3 mil, VV value USD 8 mil. East Ambition (28,400 DWT, 2000, Naikai Setoda) sold for USD 3.8 mil, VV value USD 2.71 million, “said VV.

Finally, in the container segment, the shipping valuations expert said that values have remained relatively stable with a softening in Post Panamax values. A 7-year-old Panamax the India Rickmers (4,250 TEU, 2009 blt, Jiangsu New Yangzijiang) was sold for scrap last week, maintained VV, while Rickmers itself has denied the said claim.

Meanwhile, in a separate note on the S&P market, Allied Shipbroking said that “on the dry bulk side, activity continues firm and it looks as though the upward pressure on prices has finally started to show face. With optimism held thanks to the much improved rates being seen now and many buyers looking at 2017 with a more favorable light, the willingness to place slight premiums on last done levels is becoming more and more the typical pattern. There is still a bit more to go before we start to see significant increases being noted, especially on the more modern tonnage, however the trend is there and seems to be gaining pace. On the tanker side, things are still fairly slow on the activity front and despite the recent improvements seen in the freight market thanks to the seasonal demand increases, buyers are still not there to heavily compete on vessels circulating them market at these levels. It will take a while for confidence to recover after the big drop noted in the summer and many are waiting for OPECs final plan to action”, the shipbroker concluded.

Nikos Roussanoglou, Hellenic Shipping News Worldwide

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