The dry bulk sector should brace itself for “an explosion in orders” of kamsarmaxes, according to the latest weekly report from analysts Alphabulk.
Noting that there had been orders for two panamaxes and 22 kamsarmaxes in the first half, most ordered in China by Greek owners, Alphabulk warned “at least 50 more” are believed to be in the pipeline, the majority of which will deliver in 2019 and 2020.
Just two kamsarmaxes were ordered throughout 2016.
Alphabulk data also shows 17 capesize orders so far this year with a large number of LOIs to boot.
In the supramax sector there have been 24 orders placed in the year to date.
Khalid Hashim, managing director of Precious Shipping, on hearing of the kamsarmax “explosion” cautioned owners against rushing to the yards.
“Adding newbuildings at this time in the cycle of the market, in any sector of the dry bulk market, is an uncalled for excess being created on the supply side. The one caveat is that the panamax sector is not being rebuilt but is being replaced by kamsarmaxes, so from that point of view, it might make some sense,” he told Splash today.
Martin Rowe, a broker with Clarkson Platou in Hong Kong, was more sanguine about the news noting record low ordering for the past two years and continued healthy demand growth.
Clarkson Research show there was just 1% fleet growth in the panamax/kamsarmax fleet in 2016 and 2.7% is expected in 2017. Moreover, Clarkson Research is predicting global seaborne trade growth for bulkers will be up by an impressive 3.5 to 4% this year.
“Orders placed now will not need to be built with ballast water treatment systems fitted as standard, which may be a factor,” Rowe noted.
Panos Patsadas from broking firm Target Maritime Transport said the kamsarmax rush was merely as replacement tonnage for the increasingly obsolete panamax sector.
“Stem sizes per segment these days require 8,000 to 10,000 more deadweight carrying capacity ships than 10 years ago. Bigger is better for charterers, and the recent hike in kamsarmax new building orders, slowly rendering panamaxes obsolete, should come as no surprise,” Patsadas explained.