Large Dry Bulker Shipbuilding Prices Up in April

During April, 2013 new build prices for capesize, kamsarmax and ultramax vessels rose higher than in the previous month.

Purchase prices for ships are often good indicators of financial health in the shipping industry. When shipping demand is expected to grow more than the supply of ships, shipping companies will place additional orders, which drives up purchase prices, reports Xun Yao Chen, Industrials Analyst at 'Market Realist'. Additionally, when firms are able to charge higher prices for transporting goods across the ocean, this allows them to generate higher gross margins and returns, increasing the value of ships themselves.

Capesize vessels, the largest ship class that primarily haul iron ore and coal across ocean, rose $500,000 to $47.5 million. Kamsarmax and ultramax also rose by 500,000 individually. While kamsarmax and ultramax are smaller than capesize vessels, they also primarily carry iron ore and coal.

Source: Market Realist