Scorpio Bulkers Continues to Scale Back Newbuilding Plan Amidst Dismal Dry Bulk Market

scorpio bulkersFollowing Scorpio Bulkers’ announcement on Wednesday of their plan to build six LR2 product tankers in lieu of their planned Capesize bulk carriers, the company announced today it has entered into an agreement to sell one of their Kamsarmax bulk carrier newbuilds for approximately $30.7 million.

The vessel is currently being constructed at Tsuneishi Group (Zhoushan) Shipbuilding Inc., and has an expected delivery date in the third quarter of 2015.

The buyer of the newbuild was not mentioned.

Danish dry bulk shipper Norden provided commentary on the dry bulk sector which ended up to be a serious disappointment to those operating in the sector.

“It was not a stand-alone factor that ruined the dry cargo market in 2014,” commented Norden’s Interim CEO Klaus Nyborg. “A number of events pulled in the wrong direction resulting in a significant worsening of the market. The Indonesian export ban on a number of raw materials resulted in a large number of unemployed vessels entering a market which was already strained by too much capacity. At the same time, coal transports suffered under weather conditions decreasing the demand for coal and political actions limiting the import of coal into the very important Chinese market. In addition, financial instability in South America has also impacted the market and pushed rates downwards.

“The result was a very poor market, which also hit NORDEN hard,” notes Nyborg.