According to Veson Nautical’s 2024 End of Year Market Report, values for bulkers strengthened for most of the year, rising across all age sectors and subtypes compared to 2023 levels.
The most impressive gains were seen in the Capesize sector, where values for 15-year-old vessels of 180,000 DWT increased by approximately 26.1% year-on-year. This was driven by firm earnings for Bulkers, fueled by strong imports of iron ore, bauxite, and coal to China, along with the rerouting of vessels from the Red Sea around the Cape of Good Hope.
The longer distance required for this increased ton-mile demand significantly impacted earnings this year. However, although Bulker values remain high compared to historical averages, levels have corrected lower in the final quarter of the year due to somewhat weaker sentiment.
Overview
- 2024 has been a dynamic year for the Bulker market, with strong activity in newbuildings, sales, and a restrained demolition sector.
- Values for Bulkers saw significant growth, especially in the Capesize segment, driven by increased ton-mile demand and strong earnings.
- Weaker sentiment in the final quarter led to a slight correction in values.
- The newbuilding market experienced continued growth, particularly in the Post/Panamax and Capesize sectors.
- Chinese dominance in ordering and shipyard production continues, solidifying their position in the Bulker industry.
- The sale and purchase market remained active despite fluctuating values.
- China emerged as the leading investor, surpassing Greece, reflecting a shift in Bulker ownership.
- Demolitions remained low as strong earnings encouraged owners to keep older tonnage trading.
- The trend toward trading older vessels signals resilience in the sector, supported by favorable market conditions.
Newbuildings
A slightly busier second half of the year for Bulker newbuilding orders. Overall, Bulker newbuildings were up for the third year in a row, with 501 orders placed, an increase of approximately 6% year-on-year. This surge is due to the recent increase in demand for Bulkers, driven by the rerouting of vessels to avoid the Red Sea hostilities, which has in turn increased ton-mile demand for this sector.
Throughout the year, Bulker newbuilding values remained at their highest levels since 2009. For example, values for 3-year-old Capesizes of 180,000 DWT have increased by approximately 4.7% year-on-year, from USD 66.09 million to USD 69.17 million.
Once again, the Panamax sector saw the highest volume of orders, with a total of 200 vessels ordered, accounting for approximately 40% of Bulker orders. The Ultra/Supra/Handy sector was the second most popular, with 175 orders placed, representing around 35% of the market. In third place were the Capesizes, which accounted for around 13% of new orders, with the volume of orders nearly doubling from 2023 levels, reaching 65 orders. The Handysize orderbook share fell to approximately 12% this year as owners looked to the larger capacity of the Ultra/Supra/Handy sectors, with only 60 new orders placed, down from 111 just two years ago.
Chinese owners dominated Bulker orders this year, with 142 contracts signed, accounting for about 28% of all orders. Greece came in second with 57 orders, a decrease of around 37% year-on-year. Taiwan ranked third with 19 new Bulkers scheduled, accounting for about 4%, followed by Japan with 17. Singapore rounded out the top five with 12 new Bulkers ordered.
Chinese yards received the lion’s share of Bulker orders once again, accounting for three-quarters of the 2024 Bulker orderbook. These yards benefit from competitive newbuilding costs combined with recognized quality. The number of orders has increased for the third consecutive year, totaling 388, which represents a 75% share of the market.
Japanese yards were the second most popular choice for Bulker newbuildings, although orders fell by approximately 24% year-on-year, with 82 new contracts compared to 108 in 2023, due to limited capacity and high prices. In third place was the Philippines, which also saw a decline in orders, down by around 42% year-on-year, with 15 new orders placed, accounting for approximately 3% of the market.
