The lowest new-build prices for dry bulk carriers since 2003 is so far not tempting an uptick in orders for new vessels, according to analysis from shipping association, BIMCO. Dry bulk carrier contracts placed at yards in the big three shipbuilding nations, China, South Korea and Japan, totaled just 11.3 million DWT compared to 58 million DWT in 2014.
“The fact that ship owners have refrained from ordering new dry bulk ships despite the low new-building prices is positive for the future of the dry bulk market,” said Peter Sand, Chief Shipping Analyst at BIMCO, noting that the dry bulk fleet is already oversupplied and suffering from historically low prices.
“However, for there to be an actual shorter-term improvement in the market, we would need to see a spike in demand or a substantial reduction in the fleet,” continued Sand.
Chinese shipyards have experienced the most significant fall in demand this, signing contracts for just 2.5 million DWT of new bulk carriers this year. This compares to 34 million DWT last year.
The only bright spot for shipbuilders came in September when Nippon Steel & Sumitomo Metal Corp. (NSSMC) ordered nine VLOCs from two Japanese shipyards to replace its fleet of capsize bulkers.
“The dry bulk market has been in a slump in 2015 mainly due to the great imbalance between supply and demand,” explained Sand. “The demand for dry bulk commodities has slowed down during the year, with coal taking the biggest hit.”
“Meanwhile on the supply side, owners have been reluctant to scrap their ships during the second half of the year at the same pace as during the first half of the year, where we saw a new half-year record,” concluded Sand. “This has left the fleet at a level not corresponding with the diminishing demand. The unfavourable situation has driven the dame for dry bulk ships down and ultimately the price of new-buildings has followed suit.”
Edited by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/handling/04122015/dry-bulk-carrier-orders-remain-weak-3244/