Ship owners have kept on piling up newbuilding orders in the tanker sector, as prospects for the market remain bright. According to the latest shipbrokers’ reports, ship owners still prefer tankers, when it comes to newbuildings. Allied Shipbroking noted that “there was a nice string of new orders in the tanker segment emerg-ing this week adding further tonnage to the product tanker and Aframax orderbooks. Further to these there was also some notable activity being reported in the smaller containership and gas carrier markets as well”.
Allied noted that “overall the amount of activity that emerged this week seemed to have shown a market more lively then what we have seen during the majority of this year. Once again and as has been mentioned countless times, it has been prices that have proved to be the main driving force behind most new orders reported, while it will be key to see further discounts if shipbuilders want to keep the current momentum going. The key issue however one must note is that beyond the pricing benefits given in the current market there is little else to go on and as such it is one of the reasons new order-ing activity has been showing up in small “waves” this year. Given the fact that some of the reported orders end up failing to secure the required refund guarantee letters, this all points to a serious shortage in new orders that should continue to trouble shipbuilders consider-ably over the coming year”.
Meanwhile, in a separate report, shipbroker Clarkson Platou Hellas noted that it was “a relatively quiet week in the newbuilding market, with only a few orders to report. In the container market, Tsuneishi Zhoushan are reported to have won an order for two firm 2,700 TEU Container Carriers from an unknown Asian owner for delivery in 2018. Regional Container Lines Public Co., Ltd. have announced an order for two firm plus two optional 1,668 TEU Container Carriers at Jiangsu New Yangzijiang. The firm vessels are set for delivery in 4Q 2017 and the optional vessels will be delivered in 2018, if declared. It also came to light this week that Taizhou Kouan have signed a contract for four firm 1,000 TEU Container Carriers which all will deliver throughout 2017”.
Clarkson Platou Hellas added that “whilst there are no new orders to report for Tankers or Dry this week, there is one order to report for Gas, with Navigator Holdings Ltd. (Navigator Gas) announcing an order for one 38,000 CBM LPG Carrier at Hyundai Mipo Dockyard. This single unit is due to deliver in August 2017 from Ulsan, Korea, the shipbroker concluded.
In the S&P markets things are quite different though, as low prices make dry bulkers an attractive option for when the market rebounds. According to Allied, “activity in the dry bulk market was noted in all size segments this week with particular focus being made on the more modern units available in the market. This is likely to continue to be the prevailing trend, as we have seen a strong number of modern good quality units enter the market, while the ample supply will likely push for even further price decreases at least in the near term”. Allied added that “on the tanker side, it seemed as though the much anticipated price corrections start to reveal themselves in actual market transactions while the activity being noted in the larger crude oil carriers pointed to a more realistic approach from sellers. The product tankers are still holding their ground in terms of prices, while we have even seen a slight incline towards some price firming especially in the LR segment”.
Finally, on the demolition market, Allied said that “with the slight boost given to the market the week prior quickly evaporating and end buyers pulling back from the market, prices noted a full correction on their previous small gains. Activity also was on the low end this week, given that most owners once again retract-ed their interest at the first indication of cash buyers offering softer price levels. The glut noted in the steel market and the strengthening of the dollar are creating serious “cracks” and as such the whole market seems to be holding on to a thin thread. If something doesn’t change and fairly quick we might come face to face with yet another serious market corrections equal if not stronger then the one we faced during the summer period. For the time being the precarious balance is still being kept, though given that the dry bulk market still finds itself in dire market conditions, one wonders how long tonnage can be held back by their owners from being sent to the breakers yards”, the shipbroker concluded.
Source: Hellenic Shipping News