Dry Cargo

Ultramax newbuild prices up 13% this year

Dry bulk and tanker newbuild prices are heading in divergent directions this year in line with current freight rate trends.

Brokers Intermodal note in a weekly comment that dry bulk newbuilding prices have increased since the beginning of the year, with those for ultramax vessels enjoying most of the upside, being around 13% up compared to January.

On the other hand, despite steady ordering in the sector led by the Greeks, tanker newbuilding prices have moved down. The one exception is the MR size, the newbuilding price of which is up more than 6% since January and has outperformed the rest of the tanker sizes that are roughly 5% down during the same period.

Fellow Greek broker Allied notes that many new dry bulk newbuild contracts are coming to light this week, a lot containing options too.

“To an extent, this rebound reflects the considerable improvement noted in the freight market during the past two months and the general uptrend in sentiment, despite the downward correction noted recently. As we enter the final quarter of the year which is traditionally stronger in terms of earnings, expectations are for a firm flow of new contracting to continue if not further intensify,” Allied maintained in its most recent weekly report.

Clarksons Research’s Newbuilding Price Index finally turned upwards in January this year after three years of declining prices. Nevertheless, the index shows prices are still at their lowest for more than a decade.

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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