New ship orders are rebounding, while ship prices are diverging.

2017-06-26 09:00

Since the beginning of this year, oil tankers newbuilding orders have increased significantly. However, the increase in order volume has not led to higher newbuilding prices. On the contrary, bulk carriers the increase in newbuilding orders has helped push up newbuilding prices.

Clarkson's data shows that year-to-date, newbuilding orders in the tanker market have increased by 48% year-on-year. During this period, global VLCC newbuilding orders exceeded 30 vessels, almost double the 13 vessels in the whole of last year. This includes the recent order of 4 319,000-dwt VLCCs by Frontline from Hyundai Heavy Industries 。

Despite this, newbuilding prices for various tanker types have continued to decline. Over the past three months, VLCC newbuilding prices have fallen by 3%, with the current average market price at around US$80 million. Meanwhile, Suezmax newbuilding prices have fallen by 1.5%, and Aframax newbuilding prices have fallen by 1.9%; only MR tanker prices have shown an upward trend, increasing by 0.5%.

All recent VLCC orders have been received by South Korean shipbuilders. The Greek shipowner Angelicoussis Group placed an order for 3 VLCCs with Daewoo Shipbuilding; Hyundai Mipo Dockyard received VLCC orders from Sentek and Neda Maritime, while Samsung Heavy Industries also received new orders from BW Group and Capital Maritime & Trading.

However, the price of some of these newbuilding orders is significantly higher than the average market price, with BW Group's order of 4 VLCCs from Samsung Heavy Industries priced at US$83.74 million per vessel.

Gibson Shipbrokers believes that the reduction in backlog and worsening financial conditions have forced shipbuilders to repeatedly lower newbuilding prices to secure more orders. Low ship prices are also the main reason why shipowners have recently ordered tankers.

In contrast to the tanker market, bulk carrier prices have indeed increased after the increase in newbuilding orders, mainly in China and Japan. According to Clarkson's data, newbuilding orders for bulk carriers have increased by 74% this year, affecting the prices of Capesize bulk carriers, which increased by 0.8%, Panamax bulk carriers, which increased by 1.7%, and Supramax bulk carriers, which increased by 4.9%.

Recently, Taiwan Navigation ordered two 62,000-dwt bulk carriers from Daido Shipbuilding at a price of US$25.5 million per vessel, which is US$2 million higher than the average market price for Ultramax bulk carriers given by Clarkson.

Waigaoqiao again receives an order for two 180,000-ton bulk carriers from Fuhua.

Rumors say COSCO Shipping Group will acquire Orient Overseas Container Line.

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