Newcastlemax newbuilds to flood sector this year

Newcastlemax newbuilds to flood sector this year

Brokers Braemar ACM have run the numbers for the dry bulk sector this year, highlighting the enormous volume of larger bulker newbuilds set to hit the waters this year.

In the report, entitled The Big Picture: The year ahead – 8 things to look out for, Braemar ACM noted there are a total of 555 bulk carriers slated for delivery over 2020. These total 55.4m dwt, 36% greater than the total deliveries seen in 2019. The analysts at the brokerage are forecasting overall supply to grow by just over 4% in 2020.

“Fleet additions this year vary across sectors. Within each bulker segment, the 2020 orderbook is heavily skewed towards the larger designs,” the report noted, pointing out that the 304-strong newcastlemax fleet is set to grow by 65 vessels this year, representing 21% of this segment’s existing capacity.

Similarly, with 156 of them set to deliver, ultramaxes are braced for their segment to swell by 17% this year, perhaps a more alarming statistic as newcastlemaxes are often ordered with long term charters fixed and the ageing newcastlemax fleet is also scrapping more ships, with news this week, for instance, that Berge Bulk has sent the 1993-built Berge Hua Shan to Bangladeshi breakers, its fifth demo in the last 12 months.

Elsewhere in the report, there was a focus on the impact of the global sulphur cap and how ships with scrubbers will likely trade along different routes this year.

“With sulphur cap regulations now enforced, we expect to see some bifurcation in the trading strategies of ships fitted with scrubbers and those burning low sulphur fuels,” Braemar ACM noted, adding: “Those with scrubbers are more incentivised to make long-haul trades, and ensure they regularly pass bunkering hubs to take on high sulphur fuel bought on term contracts.”

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

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