Decline in newbuild price will increase vessel supply
- Details
- Category: Construcción Naval
- Published on Tuesday, 17 February 2015 04:29
- Written by Administrator2
- Hits: 2058
Marketr
Newbuild prices
Newbuild vessel prices indicate the future rates of Capesize, Panamax, and Handymax/Supramax due to the long construction period. A dry bulk vessel takes almost two or three-plus years to build, and each costs ~$60 million plus. These prices indicate the longer term fundamentals of the dry bulk shipping industry supply and demand.
For bulk carriers, Capesize vessel prices stood at $53.3 million in January 2015 compared to $54.2 million in December 2014 as compared to $53.5 million in January 2014. From January 2013, Kamsarmax and Ultramax vessel prices recorded $28.6 million and $26.4 million, respectively, as compared to $29.0 million and $27.2 million, respectively, in the previous month.
Impact on markets and companies
It is difficult to strike a new vessel acquisition deal in the current dry bulk environment, because not only are ship prices lower, but there are other considerations to take into account. The most important of these is how current prices are faring compared to the past prices.
Shipbroker Allied Shipbroking noted that with these grim market freight rates, it is difficult to consider an investment in the dry bulk market. Capesize vessels managed to show marginal correction, but the dry bulk market as a whole is at poor levels, with the Baltic Dry Index hovering at just above 700 points. However, the current conditions are suitable to the ship owners who are focused on making purchases at close to historically low price levels.
The Guggenheim Shipping ETF (SEA) and the performance of dry bulk shipping companies like DryShips (DRYS), Diana Shipping (DSX), Navios Maritime Partners (NMM), Navios Maritime Holdings (NM), and Safe Bulkers (SB) are likely to be impacted with the low newbuild vessel prices, as more and more buyers will be attracted to buying vessels, thus increasing the supply of vessels.