Newbuilding Orders Slowed Down at the End of the 2020

Newbuilding Orders Slowed Down at the End of the 2020

2020 won’t be a year to remember for newbuildings. A combination of pandemic, commercial contraction and uncertainty about instructions led most shipowners to the S&P market. In its report, shipbroker Allied Shipbroking said:

“An overall quiet week for the newbuilding market, given the typical sluggish pace of the Christmas holiday period.  Both the dry bulk and tanker sectors were completely absent in terms of fresh order activity. Also dry bulk freight rates noticing a fair boost as of late, especially for the bigger sizes. So that we can expect a more vividness in the market, even at the early part of next year. On the other hand, with the tanker sector being in the doldrums in terms of earnings, there is limited room to point to any given direction of the market.”

Given this, it is likely that we will continue witnessing a slow trickle of activity take place. In addition, the container market experienced a hefty boost with the increase in the number of new orders at the end of the year and last week. With all that said, we hope to see a more sustainable construction market next year. According to InterMedal, almost one week before the end of the year, interest in the newbuilding market was mostly concentrated in the Container sector.

We saw the most interesting order in the last week. The Ocean Network Express has signed an LOI for the charter of 6 ultra-large Container vessels from Shoei Kisen. These six container vessels will exceed the 24,000 teu becoming the largest units ever built. In the dry bulk sector, Chinese owner Seacon declared an option for two Kamsarmax units to be built in CSSC Huangpu shipyard.

Meanwhile, in the S&P market this week, a large number of units started working on the dry bulk side for another week. Of course, they continued their work by slowing down in terms of activity w-o-w basis. Despite the dull holiday atmosphere, the shopping appetite seems to be very high right now. But interest is different in most sections and age groups.

On the tanker side, relatively few transactions took place. It is true that long unmotivated days have not helped maintain the balance of the S&P market. Many have postponed their plans for now. Therefore, we can not see a rapid change in the dominant trend. It is obvious that a lot will depend on how things develop from the side of returns during the 1st quarter of 2021.

In the tanker sector, we had the sale of the “ANTONIS I. ANGELICOUSSIS” (306,286dwt-blt ‘00, S. Korea). They sold it to Greek buyers, for a price in the region of $19.5m. On the dry bulker side sector, we had the sale of the “SBI PHOEBE” (63,500dwt-blt ‘16, China). they also sold this to US based owner, Eagle Bulk, for a price in the region of $17.65m.

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