Falling Oil Prices Push Owners to Offload ECO Ships

Newbuild ECO bulkers are up for sale

Ship owners are seeking to offload newbuild ultramax ECO bulkers as oil prices are fated to remain low and in the expectation of a weak market next year, Tradewinds reports.

One source suggested that a new generation of fuel-efficient, 64,000-dwt vessels were attractive to buyers when bunker prices were hitting around $700 per metric tonne.

"But with the fall of bunker costs, the advantage of these eco-fuel ships has been eroded," said the source.

There are 548 ultramaxes between 60,000 dwt and 65,000 dwt on order out of a total of 700 bulkers on order, according to Italian broker Banchero Costa, with delivery dates for the vast majority being 2015 and 2016.

Most orders are with Chinese yards.

It is estimated that 15 percent of newbuild ultramax bulkers due for delivery next year are up for sale.

"There are more than 40 newbuildings for sale," said a source.

"Poor market sentiment and large orderbook are the key reasons driving the sales."

Ship owners looking for buyers are said to include China Minsheng Financial Leasing, Wah Kwong Shipping, Great Horse Shipping, and Parakou Shipping.

Others are choosing not to exercise options for newbuilds, with shipyards offering reduced prices.

Another market insider suggested that shipowners had deliberately ordered extra ships when prices were low in the hope that they could be sold for a profit at a later date.

Prices were as low as $25 million when current orders were placed but current prices are said to be at $27 million to $28.5 million.

Star Bulk's CEO said earlier this year that older, less fuel-efficient bulkers still have a role to play in the company's growth plans.