D’Amico Shipping On $290 Million Bulker Buying Spree

D'Amico Shipping II
Image credit: D’Amico Shipping

reuters_logo1By Silvia Antonioli and Agnieszka Flak

LONDON/MILAN, Aug 27 (Reuters) – Shipping company d’Amico Societa’ di Navigazione has placed orders for dry cargo ships totaling $290 million, a senior official said, as it sees ship building prices near a bottom and expects a recovery in freight demand.

One of the world’s leading privately owned marine transport companies, it ordered 11 bulk carriers, – vessels which transport dry goods such as grains and iron ore.

In addition, dACC Maritime, d’Amico’s joint venture with coal trader Coeclerici, also ordered two bulkers.

The order was made to meet growing demand for transport of particular types of cargo, especially steel, steel pipes, wood pellets, forest products, as well as for coal, iron ore and grains, Lucio Bonaso, the chief executive of the dry cargo subsidiary d’Amico Dry, said.

The latest order boosted d’Amico group’s total expenditure in new vessels to $600 million so far this year, a spokeswoman for the company said, a sign it believes the shipping industry will soon recover from its worst downturn in three decades.

D’Amico International Shipping, a listed subsidiary of d’Amico Societa’ di Navigazione had previously announced an investment of $260 million in new tankers, vessels which move petroleum products and other soft chemicals and edible oils.

“We expect a global economic improvement from 2014 with an increase in demand for transportation that together with a fleet growth slowing down will help the shipping market and will drive freight prices higher,” Bonaso told Reuters.

“While prices for new-built vessels are currently at historic lows, on average, and possibly below cost, we think prices are bottoming and will likely rise in the future driven by higher labour costs, steel and machinery prices.”

Analysts said sturdy commodity demand growth and slower new ship deliveries are expected to balance fleet and cargo demand for the first time since 2004, boosting freight rates by next year and into 2015.

D’Amico ordered seven open hatch bulk carriers, and four Supramax vessels from Chinese shipyard Yangfan, with delivery planned for between 2014 and 2015 and has an option to order two more vessels of each type by the end of the year, the spokeswoman for the company said.

DACC Maritime has ordered two Supramax bulk vessels from Japanese shipbuilder Oshima for delivery in 2015, while two additional units are still under negotiation, with delivery planned for the following year, she added.

Bonaso said he sees demand and supply for vessels moving towards a balance.

“While building capacity is likely to fall by about 15-20 percent in the next couple of years as several financially troubled builders are closing down, new building demand will likely grow due to the attractiveness of fuel efficient eco ship design and more funds available from investment funds.”

The executive added that there was more money available from investment funds to help build more competitive and fuel efficient vessels.

D’Amico’s ships operate in the medium range segment, using vessels with a deadweight tonnage of between 25,000 and 55,000.

D’Amico International Shipping posted net profit of $23.1 million in the first half of 2013, a substantial increase from the $97.2 million loss registered last year. (Editing by William Hardy)

© 2013 Thomson Reuters.