A ticking time-bomb of overcapacity means there is no logic to shipowners ordering dry-cargo newbuildings at the present time, a leading Greek shipbroker has warned.
N Cotzias says it can’t understand why any fresh bulker order would go ahead right now given the recent 60% crash in the Baltic Dry Index and an already bloated orderbook.
Its latest monthly report said: “The problem is that the still ticking time-bomb – which is the potential overcapacity from all pending newbuildings that the dry-bulk market still has to deal with – is rather serious, and is not aided at all by the additional reported newbuilding contracts that are constantly added to the already heavy orderbook.”
The broker counts 470 capesizes and around 660 panamaxes on order. It says 10 new capes were ordered in July alone despite the fact new capesizes were delivered at a rate of one per day last month.
It added: “We are not against any shipowner or investor's decision to book a newbuilding vessel, but frankly speaking there is no logic at this present time and under the prevailing market conditions.
“Simply speaking with just so many pending orders that are simply waiting to be renegotiated and possibly sold at discount prices, we find it very hard to understand and give the thumbs-up to all this frenzy of new order inking.”
In the year to the end of July Cotzias says 679 newbuildings, including 338 bulkers and 178 tankers, have been ordered.
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