Early signs of fleet strategy shifts in S&P market amid US port fee proposal

Greece’s Allied Shipbroking noted in its latest weekly report that while it is still too early to fully assess the proposal’s implications, initial indications suggest shipowners are already re-evaluating their fleet strategies and exploring alternative sourcing options.

Analysts have observed growing interest in Japanese-built bulk carriers, as buyers carefully assess their exposure to Chinese-built assets. However, despite improved charter market conditions, owners are not rushing into transactions. Instead, many are adopting a ’wait-and-see’ approach, carefully evaluating their options before making decisions.

Shipbroker WeberSeas has also noted strong demand for Japanese-built bulk carriers. However, they caution supply remains limited, as many owners are reluctant to sell, possibly in anticipation of higher future values.

Furthermore, WeberSeas has noted a declining preference from charterers for Chinese-built vessels on long-term contracts, as they await further clarity on the situation. Consequently, voyages to the US Gulf are taking an interesting turn, as some Chinese owners and operators appear hesitant to send their vessels to the USA.

Fewer Chinese vessels for sale

Recent reports from multiple shipbroking houses indicate Chinese-built tonnage has significantly decreased on sales lists. Moreover, when such vessels do change hands, they are often acquired by Chinese buyers. However, market sources caution this is not yet definitive evidence of the proposed US port fee’s impact. For a more conclusive assessment, these trends would need to persist over the coming weeks.

The market’s attention is now focused on the 24 March public hearing, where the potential consequences of the proposal will be examined.

Value premiums and market segmentation

According to Allied Shipbroking, if the current trend continues, sellers of Japanese-built vessels could gain leverage, allowing them to push prices higher. Conversely, owners of Chinese-built tonnage may find themselves under pressure to revise their price expectations downward to successfully offload their tonnage.

According to Allied, such a development “could lead to an increasingly segmented market, creating a clear distinction in asset values between Japanese and Chinese-built vessels”.

Allied highlighted the Ultramax/Supramax segment appears most exposed, with nearly 50% of the fleet built in Chinese yards. If buyers continue shifting toward Japanese-built tonnage, these vessels could face downward pricing pressure.