Newbuilding capacity for general cargo, multipurpose and container feeder ships has become a bottleneck as shipyards in Asia gobble up newbuilding programmes by container lines.
Meanwhile ship prices [ds_preview]rise and rise, warns Hannes Holländer, managing director of shipbroker Toepfer Transport.
HANSA: Newbuilding contracting is back with a bang. Are all the good opportunities gone already or are there some left?
Holländer: From a supply/demand perspective, there is still vast potential for new projects, be it for general cargo/shortsea, heavy lift/mpp or smaller container vessels. There are plenty of tonnage requirements out there, therefore employment of ships that are contracted today is not a problem. The bottleneck right now for contracting smaller dry cargo tonnage is yard capacity!
Who is to blame? Are the big liner operators swamping all the yard capacity with their big orders?
Holländer: Global liner carriers are indeed grabbing many available berths and whilst it might not be their intention they are squeezing out projects for smaller, more complex ships that don’t fit the big ship-standard. It is a major problem for tramp owners and operating owners in the general cargo/breakbulk or project cargo trades. We are in contact with numerous clients who are looking to order container feeder vessels or multipurpose ships with intakes or 30,000, 25,000 or 12,500 dwt and there is little attention by the shipyards. It’s causing massive frustration. A number of yards in China who used to be famous for building multipurpose vessels or other smaller specialist ships have gone out of business, are still partly mothballed or were consolidated by larger shipbuilders focusing on bigger ships and larger series of ships. Sporadically, we do see opportunities pop up for construction slots for smaller vessels and for earlier delivery, perhaps in less than 2 years’ time. In that case, owners have to pay premium prices.
HANSA: What is the outlook for newbuilding prices?
Holländer: Still going up! Prices will continue to trend up purely based on supply/demand. There is so much more demand for new vessels than yard capacity right now. And don’t forget that shipyards have a lot to catch up after a number of devastating years. They just start making money again today. On top of that, smaller vessels are facing increasing price premiums because they are more complex to build and don’t offer the same economies of scale during construction as repetitive orders for large and ultra-large container ships. Finally, the second-hand market remains red hot, causing upward pressure on newbuilding prices.
Financing is not a bottleneck any longer, it seems. What are the kind of structures you come across?
Holländer: I see a lot more traditional bank lending over the last six months, and it seems more of them are even pro-actively exploring new business in shipping. It sounds odd but even bigger banks that may have just sorted out their distressed loan portfolios are on the way back again. No doubt, shipping can be a lucrative business for them today given the relatively high net interest margins in that segment. As far as equity is concerned, there has been a substantial influx of money from very wealthy investors and family offices that can easily take tickets far beyond 200,000 €. (mph)
