Despite dry bulk rates having set new multi-year highs this year, newbuilding orders have fortunately stayed at only a moderate level as owners have continued to significantly favor second hand vessel purchases. Most recently, last month saw only approximately 24 new dry bulk vessels ordered.
In comparison, approximately 84 existing dry bulk vessels exchanged hands in the second hand market.
A lack of clarity on potential future environmental regulations have continued to lead to owners having hesitancy and delaying newbuilding purchases.
So far this year, approximately 150 dry bulk vessels have been ordered and approximately 470 dry bulk vessels have exchanged hands in the second hand market. Overall, it remains very helpful for the dry bulk market that ordering activity has stayed well below 2013/2014’s highs even as spot rates this year have been faring much better than seen in 2013/2014. Capesize rates averaged $14,580/day in 2013 and $13,800/day in 2014, and they surged to a peak of $42,211/day in September 2013. In addition, Q3 2013 through Q1 2014 saw rates average $20,694/day. Panamax rates averaged $9,472/day in 2013 and $7,718/day in 2014 and hit a peak of $16,728/day in December 2013. During Q3 2013 through Q1 2014 they averaged $11,139/day. Supramax rates averaged $10,275/day in 2013 and $9,818/day in 2014 and hit a peak of $16,333/day in December 2013. During Q3 2013 through Q1 2014 they averaged $11,760/day. Handysize rates averaged $8,179/day in 2013 and $7,681/day in 2014 and hit a peak of $11,757 in December 2013. During Q3 2013 through Q1 2014 they averaged $9,265/day. Overall, these were considerably higher peaks than seen in 2012 and helped lead to approximately 950 dry bulk vessels being ordered in 2013 and approximately 800 vessels being ordered in 2014.
2021 has already seen capesize rates average $23,034/day, panamax rates average $20,487/day, supramax rates average $19,187/day, and handysize rates average $18,274/day — with of course much higher peaks — but fortunately only 150 newbuildings have been ordered. This puts 2021 on pace to see a total of 360 newbuilding orders. Even with rates strong, it has been very helpful for longer-term dry bulk prospects that so many more second hand vessels are being purchased compared to newbuildings. For every new dry bulk vessel ordered this year, approximately 3.14 existing dry bulk vessels have traded hands. This is the highest ratio seen since 2016. With any luck, demand for existing vessels in the near term will remain much stronger than demand for newbuildings. We will be continuing to monitor this issue very closely and will be continuing to publish updates in Commodore's Weekly Dry Bulk Reports.