Japan’s Nisshin Shipping has ordered up to 10 Kamsarmax dry bulkers in China as appetite for fresh tonnage in the sector appears to be increasing. These 82,000 dwt newbuildings are scheduled for delivery by August 2023, builder Jiangsu Hantong Ship Heavy Industry said in a statement. Shipbrokers said the contract includes a quintet of firm units, plus five optional bulkers. The vessels, which could be fitted with scrubbers, were priced at more than 27m each.

Ordering activities have been slack in the dry bulker sector this year, a sharp contrast with the spirit demonstrated by boxship owners. The latest Lloyd’s List Intelligence data shows fewer than 30 dry bulkers have been ordered since the beginning of 2021, compared with more than 600 in 2020 and 340 in 2019. However, the Nisshin deal and a series of recent orders have fueled speculation that investors’ confidence may be improving with a strong recovery seen in the freight markets this year.

The Baltic Dry Index, a measure of shipping health for bulk carriers, had reached a five-month high in mid-March primally driven by surging Panamax and Supramax rates. It remains at a high level now albeit with a few corrections.

“We’ve already started to see deals bubbling under the surface,” said a Hong Kong-based broker from a leading brokerage house. The momentum is also fueled by a cooling secondhand market, where quality assets are becoming scarce with owners now reluctant to sell or further raising prices amid high vessel earnings, he said. “So, the investment interest could be gradually shifting to the newbuilding market, although it will of course depend on how long the bullish freight market can sustain.”

In addition to Nisshin’s deal, several dry bulker orders were reported by brokers earlier this month, consisting of nine firm ships ranging from Capes and Ultras. “The resuming corrective mode noted in freight earnings coupled with the increases seen in asset prices have not completely cut [ordering] interest, as confidence seems to still be robust.” said Allied shipbrokering in a recent report.

However, some market observers pointed to the soaring newbuilding prices as a key damper on owners’ ordering enthusiasm for the time being. A new Kamsarmax, for example, now costs nearly $30m to be built at tier-one Chinese yards, up from $24m in July, according to Hong Kong Hainer Ship Trading chief executive Jimmy Miao. “The ship price could rise further with the ramp-up of steel price.” he said. “This could to some extent deter investment in newbuildings.”