EuroDry chief executive Aristides Pittas plans to expand his bulker fleet to take advantage of uncertainty-driven tight supply, but he will not be doing that by ordering newbuildings.
The owner of 11 bulkers will stick to the secondhand market for two reasons, he said.
“We do not have charterers taking ships for longer periods,” he told analysts during the company’s first-quarter earnings call.
“That’s why you see that not only us but everybody is reluctant toward the dry bulk vessels today, at prices which are 25% to 30% higher than what they were a couple of years ago.”
New York-listed EuroDry has bought two secondhand vessels so far this year in a tight dry bulk market in which first-quarter profit grew by almost 24 times ago to $10.5m compared to the same period of last year.
The shipowner acquired the 76,400-dwt Santa Cruz (built 2005) for $15.75m in late April after buying the 57,924-dwt Molyvos Luck (built 2014) for $21.2m in January.
But strong first-quarter results are not enough to tempt Pittas to buy brand-new bulkers, especially when the average price for a panamax newbuilding jumped to $34.3m in 2021 from $27m in 2019, according to Clarksons.
By comparison, the average secondhand price for 15-year-old panamaxes went to $16.8m last year from $8.25m
Pittas is instead ordering new vessels for Euroseas, a sister company that has nine newbuildings on order through 2024 from Hyundai Mipo Dockyard.
“We are seeing newbuilding orders in container ships where people can get long-term charters,” he said.
“I think this is the main reason that you see this discrepancy between container ordering and dry bulk ordering.”
Euroseas announced on Wednesday that it has secured three-year fixtures for two 2,800-teu feeder boxships at $48,000 per day that are set for delivery in the first quarter of 2023.
The charters may be extended to 40 months, Euroseas said.
On Monday, Euroseas committed $86m toward two more feeders of the same size from Hyundai Mipo Dockyard. They are due for delivery in the fourth quarter of 2024.
Newbuilding prices for boxships of this size have also increased considerably to $40m last year from $31m in 2019.