During the Nasdaq-quoted operator’s fourth-quarter conference call George Economou pointed out that there is “ample” capacity in China since ordering has slowed.
“There will be price pressure [on the newbuilding front] although I don’t see them going down by more than 15% [over the next one or two years],” he added in response to Fotis Giannakoulis of Morgan Stanley.
Economou said he isn’t surprised that no bulker orders have been sealed since last year, a trend driven by lacklustre freight rates and grim market forecast.
The executive also pointed out that he doesn’t expect to see shipyards in South Korea and Japan attempt to break back into the dry-bulk market despite the decline in orders for offshore support vessels and other types of sophisticated tonnage.
When pressed for a prediction about newbuilding prices in China Economou argued that a panamax might command as little as $25m to $27m going forward.
If shipyards do get more aggressive with pricing in the months ahead he estimated that the cost of a capesize bulker could fall to a low of approximately $48m.
Less than a week ago Compass Maritime told clients that an owner would likely have to pay $53m if it wanted to order a 170,000-dwt bulker in today’s market.
The US sale-and-purchase broker indicated that panamaxes are going for approximately $28m on average, which is equal to its estimate for a prompt resale.
