Analysts predict further declines in bulk carrier values

Shipbroking sources report dry bulk owners looking to invest in secondhand tonnage have recently adopted a wait-and-see approach, anticipating further declines in asset values amid a weak charter market. According to a Veson Nautical presentation, this scenario is expected to materialise.

During a recent webinar, Veson Nautical senior maritime analyst Mikkel Nordberg noted in the second half of 2024, Panamax values dropped by 13%, followed by an 11% decline in the Capesize segment. Supramax and Handysize bulk carriers experienced more moderate declines of 4% and 3%, respectively. These corrections followed a strong first quarter, during which Capesize values surged 19%, Panamax values 14%, and Supramax and Handysize prices increased by 16% and 12%, respectively.

Mr Nordberg expects Panamax values, which saw the steepest decline – erasing their gains from early 2024 – to remain relatively stable throughout the year. In contrast, he sees further downside potential for Capesize, Supramax and Handysize vessels, as current values appear difficult to justify given prevailing freight rates.

Lower ordering activity 

In the newbuilding market, Veson Nautical anticipates a decline in total ordering activity. Mr Nordberg highlighted new orders for container vessels and LNG carriers are likely to slow, mainly due to large orderbook-to-fleet ratios. However, this decline will not be fully offset by new orders for tankers and bulk carriers.

The Veson Nautical presentation also pointed out high prices and premiums for scrubber and dual-fuel technology continue to limit ordering activity.

With demand at shipyards expected to weaken, downward pressure on newbuilding cost is likely, though prices remain historically high.

According to Greece-based Allied Shipbroking, over the past 12 months, Panamax, Supramax and Handysize newbuilding values have declined by 7% to 10%, while Capesize values have remained strong, rising by 14%. Over the past six months, prices in the three most affected segments have dropped between 10% and 13%.