Twenty-three Capesize bulker orders have been converted to tankers as of now.
This month, South Korean shipowner Dong-A Tanker converted four Capesizes it ordered at Hyundai Samho Heavy Industries in June 2014 to Aframax tankers.
The company has since secured timecharter contracts for tankers from Teekay Tankers.
The ships were ordered for USD61 million each.
German owner Reederei Johann Blumenthal has changed four of its Capesize orders to tanker orders.
In addition to Blumenthal, Scorpio Bulkers has previously converted nine Capesize orders, Taiwanese owner Sincere Navigation has converted two Capesize orders, and South Korean owner Sinokor Merchant Marine has converted four Capesize orders.
Dry bulk consultancy Commodore Research commented, “These developments remain supportive to the Capesize market for 2016 and afterwards, and several more Capesize conversions are expected to be announced.”
The Baltic Dry Index’s plunge to an all-time low in February has prompted several shipowners to change Capesize orders to tankers to allay shareholders’ worries and improve profitability, especially when oil and product tankers are seeing better freight rates. The plunge in oil prices has stimulated oil demand and trade.
However, this is unlikely to bring about an overall sustained recovery in dry bulk freight rates.
Commodore said, “Our bearishness continues to rest most on the huge amount of Ultramaxes ordered during 2013 and 2014, rather than Capesize orders.
“Overall, the huge amount of Ultramaxes ordered during 2013 and 2014 remains an issue for Handymaxes and Panamaxes. Unfortunately for the dry bulk market at large, no Ultramax order conversions have been announced and it remains to be seen if any of these orders will be converted.”