Market Analysis
Hot Keywords
2011-08-15 09:19:15

The secondhand ship purchasing activity has maintained its pace with some signs of softness this week as we are in the low summer period and economic conditions are not favorable for investment decisions. The dry market has shown instability with the BDI trend being negative and capesize earnings flirting with the low levels of the end 2008 / early 2009. However, the newbuilding business has not been refrained leaving questions about the outlook of the freight markets, since the world economy seems to have been entered in a reverse mode heading probably to one more recession, hoping not of the same magnitude of the 2008 financial crisis.
Overall, the newbuilding business is up by 93% in comparison with the buying momentum in the secondhand market, while the demolition activity is at similar levels with the volume of S&P activity. The week closed with 26. transactions reported worldwide in the secondhand and demolition market, posting a 44% decline from a similar week in 2010 when 18 transactions had been reported and secondhand ship purchasing activity was standing 87% lower than the ordering business. The highest activity for one week more has been recorded in the newbuilding market with 29 fresh orders reported worldwide.

SECONDHAND MARKET
In the secondhand market, 15 vessels reported to have changed hands this week at a total invested capital in the region of US$261.6 million, 1 transaction reported with undisclosed sale price. In terms of the reported number of transactions, the S&P activity is down by 31.8% from last week’s activity and up by 114.3% comparable with previous year’s weekly S&P activity when 7 vessels induced buyers’ interest with bulkers and tankers grasping 43% and 29% share respectively of the total volume of S&P activity. In terms of invested capital, the bulkcarrier sector was the most overweight grasping 78.6% of the total invested capital.

NEWBUILDING MARKET
n the newbuilding market, the activity has been eased from last week’s levels, down by 48%, due to reduced ordering business in the bulk carrier and tanker segment by 79% and 57% respectively. Containers have monopolized investors’ ordering interest with a 75% week-on-week rise in business. Overall, the week closed with 29 new orders reported worldwide, down by 44% from a similar week in 2010 when 52 new contracts had been reported with bulk carriers grasping 58% and tankers 23% of the total activity. In terms of invested capital, more than $1,9 billion of dollars have been invested this weeks, 9 transactions reported at an undisclosed contract price, with containers and special projects attracting 87% of the total investment due to hefty investments for post panamax container units and jack up drilling rigs.
In the bulk carrier segment, an order has been revealed in the kamsarmax segment by Taipei-based industrial conglomerate Formosa Plastics Group for two 82,000 dwt units to built in state-owned Qingdao Beihai Shipbuilding at a cost of between $33,5 and $34,5 mil each scheduled to be delivered in the second half of 2013.
In the tanker segment, intense activity has been revealed in the MR chemical/product segment. Ireland’s Admore Shipping has exercised options for two 50,000 dwt units in Korea’s SPP Plant Shipbuilding yard in 2013, the original order had been placed in 2010. Greek owner Chios Navigation has also placed an order for two 52,000 dwt units in Hyundai Mipo Dockyard with delivery in the first half of 2013. Furthermore, Socatra owner of France, following a recent order in July for two 37,000 dwt units in Hyundai Mipo, has now expanded its investment by placing further two high specification 50,000 dwt product carriers in SPP Shipbuidling at a price of $40 mil each with delivery in September and November 2013.
In the gas tanker segment, the LNG business continues promising with sources revealing that big three yards cannot now offer 2014 delivery slots for gas tonnage. Following Cardiff Marine’s firm order for four LNG of 159,800 cbm units in Daewoo, Stena Bulk has now placed two 174,000 cbm units in the same yard for delivery in 2014 with option for two more.
In the container market, more activity came to light this week in the post panamax segment amid slowing growth in the U.S. and European economies. South Korea’s Hyundai Merchant Marine announced that it has placed an order for five 13,100 TEU units in Daewoo Shipbuilding and Marine Engineering at a total cost of around $643 mil. The units will be the largest that a South Korean liner has been ordered and they will be also among the largest for the New World Alliance. Hyundai Merchant Marine has said that by enlarging ship types it will be able to cut costs and strengthen competiveness. Moreover, Seaspan is said to have signed contracts  to  build  three  10,000  TEU  units  at  Chinese  yards  for  delivery in  2014,  with  an  option  to  build  18  more  similar newbuildings. The vessels will be chartered under 10-year fixed rate time charters with South Korea’s Hanjin Shipping. In the small panamax segment, Hamburg based owner Carsten Rehder has inked a deal worth up to $200mil for up to wide beam containerships of 3,800 TEU to be chartered to German liner operator Hamburg Sud. The order has been placed in China’s Taizhou Catic Shipbuilding & Heavy Industries with financing coming from private equity sources and with option for two more units for delivery in first quarter of 2013. Furthermore, Greek Shipowner Evangelos Marinakis has declared an option for one further small post-Panamax box ship of 5,000 TEU, which was attached to an order placed in April. In the large panamax segment, China Rongsheng Heavy Industries is said to have won an order for two 6,600 TEU units by an Undisclosed European owner, but delivery dates and order price has not been disclosed.
In the container handy segment, Chinese logistics Sinotrans is said to have booked a pair of 1,800 TEU boxships to be built in Qingshan Shipyard at a total cost of $49,4 mil for delivery in October and November next year. The vessels will enter the fleet of its coastal-feeder subsidiary Sunny Express in an attempt to capitalize China’s domestic trade. According to a company’s release given the continuing growth of Chinese domestic market demand and with ship prices at historical low point, the decision to built their own high tonnage containerships is in line with the development of domestic logistic services and the business strategy of the company and Sinotrans Sunny Express.
In the offshore segment, fresh activity has been revealed for jack up drilling rigs, where demand for newbuilding business keeps its pace. Shanghai Waiqaoqiao Shipbuilding will construct two harsh ervironmental high specification jack up drilling rigs for Protector Offshore Drilling of Norway at a price of $209 mil each with delivery in 2014 and 2015, an option has been attached for three more units. In addition, Noble Corporation of USA has exercised an option for two jackup rigs in Jurong Shipyard at a price of $222 mil each with delivery in 2013, option for two more units has been attached.

DEMOLITION MARKET
In the demolition market, the Bangladesh’s Supreme Court upheld the decision of the High Court, after an appeal by green campaigners to overturn the decision, granting Chittagong shipbreakers an extension to continue importing ships for scrapping till early October. The ruling gives Bangladeshi breakers additional time to implement tougher and environmental safety rules. After witnessing high rocketing scrap rates offered by India last week, it remains to be seen if this high momentum will persist as many end buyers seem to wait and watch the direction of the market before committing to new high priced units. India remains on the frontline in terms of scrap prices offered and volume of transactions, while levels in China have shown some improvement, especially in the wet market, to bridge the gap with the India subcontinent region. In Pakistan, business is still slow, but there are expectations for more aggressive buying as the month of Ramadan approaches.
The week ended with 11 vessels reported to have been headed to the scrap yards of total deadweight 672,538 tons. In terms of the reported number of transactions, the demolition activity has been marked with almost no change from previous week’s activity, while there has been a 6.44% decrease of the total deadweight sent for scrap.  This week although a similar amount of tankers and bulkcarriers have been headed to the scrapyards, the difference in deadweight stands at 224.395 tons since larger size tanker units have been reported. In terms of scrap rates, the highest scrap rate has been achieved this week in the tanker carrier sector by India for an aframax unit of 95,029 dwt “SCOTIA SPIRIT” of 16,8450 LDT at $540/ldt. India has attracted 54.5% of the total demolition activity offering $520/ldt for dry/general cargo and $545/ldt for wet cargo, a small revise downwards for the high levels of the previous week. At a similar week in 2010, demolition activity was standing at same levels, in terms of the reported number of transactions, 11 vessels had been reported for scrap of total deadweight 628,101 tons with only three bulk carriers scrapped and tankers holding 73% of the total activity. Pakistan was active by offering the best levels among rivals, $400/ldt for dry/general cargo and $445/ldt for wet cargo.

GREEK PRESENCE
This week, Greek presence was quiet with one transaction in the secondhand market through the acquisition of an VLCC of 2000 at $ 36 mil and with 4 orders in the newbuilding market, 2 in the MR tanker sector and two in the small panamax container sector. The total invested capital is calculated to be in the region of 36mil for the secondhand market and remains undisclosed for the newbuilding orders since the details of the two MR vessel contracted by Chios Navigation hasn’t been disclosed.

2011-08-11 13:19:02

With freight rates on key routes weakened day by day, ship owners are become more cautious on new big vessel investment and showing increasing demand for secondary routes. Therefore sources estimates that containership newbuilding market may shift to focus on small ones like 1.000 teu-3,000teu.

Clarkson predicts potential rise for small containership when the European traditional summer vacation ends.

“Whilst the story of year to date has very much been about the larger container ships, we do believe that as the week¡¯s progress post holidays that we will start to see increased activity in the 1-3,000 TEU sector. This sector typically operates an older fleet and with the orderbook currently sitting at well below 10% of the existing fleet, it does seem as if this sector might prove interesting for potential new orders going forward. Whilst it is very clear of the great economies of scale that can be achieved on the long haul routes by the behemoths that have been contracted so far this year, it should also be clearly noted that the feeding off from these large ports to the smaller inter regional trades will require a greater level of these feeder ships. Thus as the Year progresses, it will be interesting to see how this story develops further.”  Clarkson said.

More and more liners follow suit to order mega containerships over-10,000 teu since Maersk contracted 20 boxships of 18,000 teu. According to Clarkson’s database, totally 181 new boxships were ordered from the beginning of this year.

2011-08-11 09:52:42

Industry analysis shows that price of new vessels gained slight increase since July. Daewoo recently secured a new order for four LNG carriers from George Ecomnomou at $212.5m, 10% higher than the former order.

In addition, the average price of containership in July stood at $94.5m per vessel, increasing by 2.2% compared with the same period of last year.

Despite of the rocketing demand for new vessels, prices were still not so good. Recent rising material price would further make the condition worse. Insiders are all expecting the significant price rise.

2011-08-11 09:14:00

Recent tanker market developments, such as a growing competition among tanker owners for cargoes, coupled with the latest negative trends in terms of oil consumption and demand, as stated by the latest forecasts from OPEC and IEA, suggest that tanker owners should be thinking towards scrapping a larger portion of their older fleet. This is what contemplates CR Weber in its latest report, where it mentions that thus far in 2011, the market has experienced several developments which, given a different trading environment, would have provided a major boost to tanker earnings: monthly Middle East VLCC spot‐market cargo counts have reached 11‐year highs, ton‐mile demand growth has exceeded expectations, and orderbook slippage and cancellation rates have accelerated.
“The inability of these developments to drive the markets back into a true start of the recover stage has been apparent: overcapacity has reached levels at which in many cases the market is incapable of overcoming. The decision to layup vessels, which in other shipping sectors is a viable intermediate‐term option, remains generally out of the question for tanker owners over fears of returning units to service following a period of disuse and implications for the vetting process of the remainder of their fleet.
The next most obvious solution to overcapacity is the exit option vis‐àvis demolition markets. Demolition values, per lightweight ton, have risen some 9% since the start of 2011 and 109% since the 2009 trough to an average of $512 this week. However, with most remaining single hull units having exited from trading over the past two years, the pace of tanker demolitions has recently decelerated. Owners of elderly double hull units (some 11% of the Panamax‐and‐larger fleet is 15 years or older) are reluctant to consider demolition sales as an option implying that the present trend could continue. Indeed, only one double hull unit has been sold for demolition this year—this unit having been originally single hulled but converted to double hull in August 2008.
The case against progressing into demolition for the oldest units in the double hull fleet has thus far been logical. Most of these units carry no debt and can therefore elk out small profits, even in a recessed market—allowing owners to wait for further gains in demolition values. Moreover, with a number of offshore oil production projects scheduled over the coming 2 years, the prospect remains for further tanker‐FPSO conversions to offer alternative resale options.
Mounting global economic uncertainty, however, poses fresh threats to this ideology. A double‐dip recession would pose a significant threat to commodities prices, potentially eroding ton‐mile demand growth and crushing demolition values simultaneously. Admittedly, it is still too soon to tell what direction the tanker global markets will take going forward and the affect this will have on tanker earnings. Thus, whether owners will start to eye demolitions markets more closely remains to be seen, but in the case where steel futures are strongly impacted and tanker prospects sour further, then this option could step in to provide a quick change to the supply/demand ratio” concluded CR Weber.
Meanwhile, in a separate report on this week’s demolition activity, Golden Destiny said that Bangladesh is still closed. “In the meantime,  players of the industry are nervous with many cash buyers feeling ambitious for the official opening of the beaches till mid-August. India continues to take the large appetite of scrapping tonnage by offering prices excess $500/ldt, while some vessels are also heading to the scrap yards in China at levels offered excess $450/ldt. In Pakistan, prices are still low comparing to the best levels offered by Indian scrap buyers, but there has been some increased demand and with the month of Ramadan being ahead we may see some improvement in rates and more vessels coming in the shore.
The week ended with 12 vessels reported to have been headed to the scrap yards of total deadweight 717,968 tons. In terms of the reported number of transactions, the demolition activity has been marked with no change from previous week’s activity, while there has been a 29% increase of the total deadweight sent for scrap due to large size units sent for scrap in the bulk carriers and tanker segment. Bulk carriers are still holding the lion’s share, 42% of this week’s total demolition activity. In terms of scrap rates, the highest scrap rate has been achieved this week in the tanker carrier sector by India for an aframax unit of 84,040 dwt “BEL TAYLOR” of 14,830 LDT at $575/ldt incl 900 tons of IFO remaining on board. India has attracted 67% of the total demolition activity offering $525/ldt for dry/general cargo and $550/ldt for wet cargo, the highest levels seen from the 2008 fall. At a similar week in 2010, demolition activity was standing at similar currently levels, in terms of the reported number of transactions, 12 vessels had been reported for scrap of total deadweight 536 mil tons with only three bulk carriers scrapped and India with Pakistan offering the $410/ldt for dry and $440/ldt for wet cargo” concluded the shipbroker.

2011-08-10 13:44:51

Secondhand values of 1,100 teu boxships seem to have fallen 40% in the last three months, with two vessels changing hands over the last week at levels around $6m.
Brokers reported German company Hansa Treuhand has sold the 1992-built, 1,012 teu Major to Esmeralda Shipping for $6.2m and Marlink Schiffahrtskontor, another small German shipowner, is currently in the process of finalising the sale of its 1996-built, 1,100 teu Merkur for a price around $6.5m.
London-based Gibson said the Merkur had been committed for sale with another buyer back in May for $10m, which subsequently failed. This illustrated how values for 1990s-built feeder vessels had weakened in recent months, it said in its weekly sale and purchase report.

2011-08-10 09:28:39

Attractive pricing, coupled with long-term prospects in freight markets usher ship owners to continue investing in new building vessels, despite the more than unfavorable current market conditions. According to the latest report from Golden Destiny, “in the new building market, more business came to light this week with activity in all main segments, bulk carriers, tankers and containers, against fears of late recovery in the shipping environment. Market players seem that they seek for more newbuilding investments so as to explore the bottom lows of the prices that yards are offering, while Japan is slipping behind due to price competitiveness from yen appreciation against dollar. However, some hidden business has been revealed this week with robust activity in the tanker segment for small product carriers and liners. The notable deal of this week was revealed in the bulk carrier segment with the ordering of two Very Large Ore Carrier units of 405,000dwt by BW Group (Berge Bulk) of Norway in Bohai Shipyard for delivery in 2014. The units will be long term chartered to Vale Brazil and the order leaves questions about the investments strategies of shipping conglomerates as they seem that dismiss fears of oversupply in the capesize segment. Overall, the week closed with 56 new orders reported worldwide, up by 87% from a similar week in 2010 when 30 contracts had been reported with bulk carriers grasping 50% of the activity. In terms of invested capital, the passenger / cruise sector appears this week the most overweight segment due to the investment decision of Carnival for placing three newbuilding units at a total cost of close to $2,15 billion. The offshore segment has experienced no activity the last days, while it used to be the most heavily invested segment in previous weeks” said the Piraeus-based shipbroker.
In a separate report, Clarksons said that “with the Korean yards due to return from their holidays next week and resume construction within their facilities, we hope the lull in the market as witnessed this week will be short lived and contracting will again begin to pick up. Of course with many Owners away for their own summer vacations this may take a little longer to really get going again.
Whilst the newbuilding market has been understandably subdued this week the Global Financial Markets have not. The Bank of Japan has again waded into the markets in an attempt to stem the appreciation of the Yen. Whilst this was effective on the day, seeing a 3.5% reverse swing it remains to be seen what the long term effect is on the currency. This intervention will likely give the Japanese yards some comfort in the knowledge that the Japanese export market has not been completely forgotten by its Government, however until there is a significant depreciation in the value of the Yen back to levels witnessed last in 2010 in the 90s (yen per dollar) then it is likely the Japanese yards will continue to struggle to compete with their Far East rivals.
This intervention has not however been the only source of news in the Financial markets with both uncertainties in Europe, along with a certain deadline in the US adding to a great deal of turbulence and a seeming loss of confidence. We will need to wait and see whether this uncertainty in the market (and the conservative investment attitudes that typically follow) will have an effect on the Ship building market, as both owners and shipyards return from their vacations and take stock for the remainder of the year” said the world’s leading shipbroker and researcher.
In terms of business concluded in the bulk carrier segment, Greek owner Capital Product Partners, a division of parent Capital Maritime & Trading, entered the bulk carrier sector for the first time by ordering one kamsarmax unit in Sainty Shipyard of China for delivery in 2014. Moreover, Cardiff Marine of Greece has added two more 176,000dwt units at Shanghai Waigaoqiao for delivery in 2014, mentioned Golden Destiny. In the tanker segment, the majority of the business came from the Japanese yards by domestic owners, while one MR unit has
been placed in Korean Hyundai Mipo for delivery in 2013. In the container market, following the ordering plethora of post panamax units this week new deals emerged in the handy sector. German owner Hermann Buss has placed an order for four 1,705 units in Chinese yard Guangzhou Wenchong, which has a long history of building tonnage for German owners, for delivery in 2012 and 2013 at an undisclosed contract price. More fresh business has also been revealed in the handy sector by Sinotrans of China and Pan Continental Shippping of South Korea. In total, 8 orders is estimated to have been placed for container units in the handy sector this week, but this does not imply that the mega containerships’ ordering trend has been faded out.

2011-08-09 13:20:36

S & P

This week has seen little in the way of Dry 'Sale and Purchase' activity. 

In Handymax sector, the M/V NIKKEI EAGLE (45,347 dwt 1995 Oshima) is reported sold to Chinese buyers at a price region US$ 15.6m. 

M/V LUCKY PEARL (34,560 dwt 1984 blt Mitsubishi) is reported sold for US$ 4.8m to Chinese buyers basis delivery with drydocking due.

At a judicial sale in Gibraltar the M/V FIDEL (26,400 dwt 1982 blt UK) is sold to Middle Eastern buyers for US$ 2.75m. 

In the Wet S+P side, activity has also been limited this week.

Indonesian buyers have purchased the Russian-built product carrier M/T INDRA (33,115 dwt 1994 blt Russia) with drydocking due in November for US$ 5.5m.

The stainless steel M/T CHEMSTAR BELLE (19,663 dwt 2003 blt Japan) reported sold to MTM, Singapore for US$ 21m.

The M/T KATERINA M (13,937 dwt 1998 blt Inchon) is reported as sold for US$ 6.8m to undisclosed buyers.

The IMO 3 product tanker M/T SAINT MICHEL (6,711 dwt 1998 blt Japan) reported sold to Greek based Buyers for USD 4.2m - 16% less than the USD 5.0m they were looking for back in May. 

 

NEWBUILDING 

With the Korean yards due to return from their holidays next week and resume construction within their facilities, we hope the lull in the market as witnessed this week will be short lived and contracting will again begin to pick up. Of course with many Owners away for their own summer vacations this may take a little longer to really get going again.

Whilst the newbuilding market has been understandably subdued this week the Global Financial Markets have not. The Bank of Japan has again waded into the markets in an attempt to stem the appreciation of the Yen. Whilst this was effective on the day, seeing a 3.5% reverse swing it remains to be seen what the long term effect is on the currency. This intervention will likely give the Japanese yards some comfort in the knowledge that the Japanese export market has not been completely forgotten by its Government, however until there is a significant depreciation in the value of the Yen back to levels witnessed last in 2010 in the 90s (yen per dollar) then it is likely the Japanese yards will  continue to struggle to compete with their Far East rivals.

This intervention has not however been the only source of news in the Financial markets with both uncertainties in Europe, along with a certain deadline in the US adding to a great deal of turbulence and a seeming loss of confidence. We will need to wait and see whether this uncertainty in the market (and the conservative investment attitudes that typically follow) will have an effect on the Ship building market, as both owners and shipyards return from their vacations and take stock for the remainder of the year.

In terms of reported business; as mentioned it has been a quiet week however SPP are reported to have won a contract from an unknown European owner for 2 x 50,000dwt Product Tankers. These vessels are provisionally scheduled for deliveries within 2H 2013 though pricing has not been confirmed for the moment.

2011-08-09 13:11:52

Did you hear about the three old guys out walking? The first one says, Windy, isn't it? The second says, No, it's Thursday!The third says, So am I. Let's get a beer.
But misunderstandings like this happen all the time in business, especially when different languages involved. And the demolition market (or perhaps "recycling" would be more correct) creates plenty of opportunities to misunderstand what is really going on.
Old Ships Get Scrapped
As we move into recession, the normal reaction is to look for a big increase in demolition. In fact this is exactly what has happened over the last couple of years. Demolition doubled from 9.5 m.GT in 2008 to 25.3 m.GT in 2009; slipped back to 18 m. GT in 2010 and in 2011 is back running at 25 m.GT a year. A big increase which will make a useful dent in the 90 m.GT plus deliveries projected in 2011. But with an orderbook of 270 m.GT, representing about 28% of the world fleet, the question is how much of this will be offset by even higher demolition in future.
The Age Effect
The age profile in the Graph of the Week is the starting point for answering this question. It shows the gross tonnage of tankers, bulkers and containerships of each age in service and on order. Steel ships are generally scrapped between 23 and 30 years of age. In 2010 the average scrap age for tankers was 26 years, and for bulkers was 31 years. Demolition volume is driven by surveys, earnings and cash. The 5th special survey at 25 years often calls for heavy repairs which in a weak market are not really worth undertaking. Or the cash may not be available. So the ship is scrapped.
Not Much Old Tonnage
Today the tonnage in the 23-29 year age band is pretty small, only 8% of the fleet, about 11 m.GT per year. One reason why there are few old ships is that single hull tankers were phased out at 25 years in 2010 the result is clear in the graph. The other is that deliveries in the 1980s were very low, averaging only 15.5 m.GT per year between 1981 and 1987 (i.e. 24 to 30 years ago). In fact the 25 m.GT demolition in 2009 and again in 2011 represents a clear out of very old tonnage left from the 1970s. A brief inspection of the age profile of ships being demolished confirms that this is the case. The latest statistics include many 1970s handy bulkers, although the occasional 1990s built ship creeps in too (for example the Cape Gulf 144,000 dwt Capesize bulk carrier built in 1990 which was recently sold for scrap).
No Magic Solutions
So there you have it. World shipbuilding is keen to deliver towards 100 m.GT this year, but the demolition profile built into the fleet demographics suggests that recycling could average out at 12 m.GT per year, once the backlog from the 1970s has been cleared. When secondhand prices fall towards scrap, higher scrapping draws in ships under 20 years old. Capesize bulker prices are already edging in that direction  who’s next?

Page 330 of 352
Most Views
Home About Us Contact Us Help Center Advertising

Copyright © 2006-2017 沪公网安备 31011502004435号  Eshiptrading.com All Rights Reserved