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Re: Alice-N-Wonderland post# 3953

Sunday, 04/25/2021 4:24:16 PM

Sunday, April 25, 2021 4:24:16 PM

Post# of 4109
Shipowners have long bemoaned the lack of clarity on the direction of future environmental regulations, which have also put many off from ordering new tonnage. There have been concerns that vessels ordered today would become obsolete well before the end of their economic life. The new ambitious stance from the Biden administration may speed up the process of clarity, but it could also mean that the current breed of vessels will become non-compliant considerably faster. If the American move proves successful and the new, stricter, targets are phased in between 2023 and 2050, new vessel designs and propulsion technologies will have to be found in the next few years. Hence, the case for ordering new tonnage in the near term may weaken further for some shipowners, especially as current newbuilds may face extensive investments in propulsion conversions during their life span.

Assuming new stricter rules are announced, under American leadership, in 2023, there could potentially be a window of opportunity to invest in new tonnage before that. Vessels ordered/delivered before such an announcement could potentially have a longer grace period. Nevertheless, it is unlikely that there will be a stampede of dry bulk shipowners heading for the shipyards, as recent ordering sprees of container vessels and tankers have limited the availability of delivery slots ahead of 2023 and has also raised the newbuilding prices. Hence, the well-publicised story of a historically thin orderbook for dry bulk vessels could remain the narrative for some time. With only a limited number of vessels expected to join the global dry bulk fleet in the next few years, the supply side is likely to remain tight and provide continued support for freight rates.


By Ulf Bergman

April 23 2021


https://www.breakwaveadvisors.com/insights/2021/4/23/change-of-us-stance-on-shipping-emissions-likely-to-maintain-thin-dry-bulk-newbuild-order-books
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