Belships adds three Ultramax newbuilds to its fleet

Norwegian shipowner Belships has entered into agreements to acquire three new Ultramax bulk carriers which are being constructed at Japanese shipyards.

Illustration; Image credit: GOGL

The Japanese-design Ultramax bulk carriers represent the highest quality and lowest fuel consumption available in the market today, Belships said.

The 64,000 dwt vessels are expected to be delivered in the fourth quarter of 2024, the fourth quarter of 2025, and the first quarter of 2026 respectively.

Belships said that it would be taking over new vessels whilst the orderbook and supply side approaches the lowest levels seen in 30 years.

As informed, the vessels are fully financed through time charter lease agreements, each for a period of 7 up to 10 years, with purchase options at current market levels during the charter.

There is no obligation to purchase the vessels, and Belships is not required to make any down payment for this transaction. Cash breakeven for the vessels upon delivery will be about $14,000 per day, according to the company.

“We are able to increase our fleet without investing any cash, this will therefore not affect our dividend capacity in the near future. We also believe the best way for us to approach the green shift is to acquire the most efficient vessels available and pair it with a financing structure which gives us a bridge to the future with optionality and flexibility,” said Belships CEO, Lars Christian Skarsgård.

The company noted that the agreements are conditional upon certain steps to be completed by the parties involved.

The Norwegian owner of dry bulk vessels has been on a fleet renewal mission over the past couple of years which resulted in the sale of older, less efficient vessels and the acquisition of efficient newbuilding bulkers predominantly built at Japanese yards.

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In January 2023, Belships took delivery of an ultramax newbuilding from Imabari Shipyard, named Belmondo.

Including the most recently announced transactions, Belships owns a fleet of 34 Supra/Ultramax bulk carriers with an average of about 4 years.

The shipping company said that it is well positioned to meet the IMO short-term measures aimed at cutting the carbon intensity of all ships by at least 40% by 2030.

“Belships is compliant with the emission regulations from IMO in 2023 (EEXI) without additional CAPEX signalling the competitive advantage of Belships modern eco-fleet,” the company said.

Market outlook

As for the market sentiment, there is low newbuilding activity for dry bulk amid a lack of conviction and alternatives for fuel and propulsion systems that restrain new ordering. Higher input costs as well as full orderbooks for container and gas vessels dictate the position with shipyards. Available delivery positions with shipyards remain distant, at least two years ahead.

The sentiment in dry bulk markets continued to soften in January, and the Baltic Exchange Supramax spot index is currently about $9, 000.

Even though spot market rates have fallen drastically, Belships believes that the sector has passed the bottom of the market. The company believes that the spot market rates will increase from Q2 onwards, and towards the second half of this year amid an expected increased activity from China reopening and some pent-up demand effects after last year.

Belships has contract coverage of 95 percent of ship days in Q1 2023, covered at about $ 20,300 per day, and 67 percent of ship days in the next four quarters are fixed at about $ 19, 800 per day.

“Looking further ahead, the supply side as observed from the number of deliveries and the publicly quoted orderbook for dry bulk is historically low. We, therefore, remain more optimistic in terms of medium to long-term market prospects,” the company said.