The newbuilding market for tankers seems to be heating up as the overall prospects for the tanker freight market appear to be more than positive for the foreseeable future, while prices remain attractive. As such, ship owners have flocked to shipyards with yet another inflow of new contracts emerging this week. In its latest report, shipbroker Allied Shipbroking noted that “prices are still on a slow downward course, though it still seems that the current trend in price discounts, brought about by shipbuilders, is too slow and while tankers have managed to see secondhand asset prices keep fairly stable over the past couple of months, for the remaining of the sectors such as dry bulkers and containerships, the low price range noted in the secondhand market is still a major deterrent in attracting any sort of fresh interest from potential buyers”.

According to the shipbroker, “it is worth noting however that even these few orders that do surface in the market are still often subject to issuance of refund guarantees and sometimes financing, both of which could essentially mean that some of these deals still face risk of falling through due to lack of financial backing for some of these shipbuilders. As such it will take a lot more then a couple of orders for tanker vessels in order to pre-vent any further closures or consolidation and without the rest of the sectors attracting interest for new orders, there isn’t enough interest to go around and keep all the current shipbuilders happy”.

Meanwhile, in a separate newbuilding market report, shipbroker Clarkson Platou Hellas noted that “starting with the tanker market, Stena Bulk AB are understood to have placed an order for three firm plus two optional 50,000 DWT IMO-II MRs at CSSC Offshore Marine (ex. GSI). The three firm units are due to be delivered in 2017 and 2018, with the two optional units 2018 if declared. Rederiet Stenersen are also understood to have signed contracts for two firm plus two optional 17,500 DWT IMO-II Chemical Tankers with Taizhou Kouan, with deliveries of the firm vessels set for 1H 2018. Only one order to report in Dry, with ESL Shipping (Finland) announcing an order for two firm 25,600 DWT Bulk Carriers at Qingshan. These Ice Class 1A vessels will be LNG-fueled and are due for delivery in 1Q 2018”, Clarkson Platou Hellas concluded.

In the S&P market, Allied said that “with three big enbloc deals emerging this week, it was a seemingly active week though overall if one looks more closely the number of buyers with keen interest in the dry bulk sector has already started to wind down. The main anticipation is of further price drops to be noted over the next couple of weeks, something that has led several parties to hold back in hope of getting a better bargain down the line.

On the tanker side, activity started to wain slightly while the main bulk of deals that emerged were for the smaller sizes. The main issue here is that most buyers believe that prices are still far beyond what most are looking to pay under the current market conditions, while with hire rates still being what they are, there are few realistic sellers at the moment even at these price levels”, said the shipbroker.

Finally, in the demolition market, Allied noted that “with the difficulties still present in much of the Indian Sub- Continent, it wasn’t long before the previous ramp up in prices once again evaporated and the few buyers in the market left the market lingering interest. It now looks as though we will be going through a series of small waves of interest which will be characterized by limited increases in offered prices, while faced with the increased pressure from the dollar strength, December could be home to even lower prices then what was on offer during the past two months. The big issue however will continue to be the lack in competing end buyers, which in other cases could have helped in keeping prices more buoy-ant, while in return the slower flow of demo candidates entering the market has helped keep the market fairly balanced for the time being. One most consider however that given the current freight market conditions faced by dry bulk vessels the tide may well turn in the case that a large influx of overage units hit the market as candidates, something that would obviously give the few remaining active buyers the upper hand in pushing for ever lower prices”, Allied concluded.