S & P
Following the sale of the (non‐grab‐fitted) "KT VENTURE" (55,868 dwt 2007 blt Sanoyas) last week clients of K‐Line, Singapore invited offers for a pair of 2006 grab‐fitted Kawasaki supramax sister units M/V VANDA COLOSSUS and M/V ARANDA COLOSSUS (55,800 dwt 2006 blt Kawasaki), these have now been committed to Pacific Carriers (Singapore) enbloc for a price in the region of US$ 33m basis a charter free delivery February and March 2013.
The Japanese controlled handymax M/V GLOBAL GLORY (45,769 dwt 1998 blt Tsuneishi Zosen) has been committed for at US$ 7.9m with SS/DD due in April 2013 to far eastern interests. On handies, M/V CS SAVANNAH (28,685 dwt 2000 blt Imabari) has been sold at US$ 9m to British Bulkers, whilst M/V SCAN BULKER (27,308 dwt 1995 blt Mitsubishi) has been sold to Middle Eastern buyers at US$ 5.8m.
With Lunar New Year Holidays now approaching, there are continued reports of new business being concluded across many of the major sectors.
In Dry; Frontline and STX Dalian have signed a contract for 4+4 x 181,000 DWT Capesize vessels for delivery every 3 months from July 2014. The total price reported for the four firm vessels is understood to be USD 187 Mill pricing each vessel at USD 46.75 Mill. Norwegian owner Jebsen meanwhile is reported to have placed an order for three firm 81,000 DWT Kamsarmax vessels at the newly formed Japan Marine United (JMU) with pricing just above USD 30 Mill. The deal is understood to include several options and be ordered on a 50/50 basis with JP Morgan. At the smaller end of the market, Nantong Hongqiang received an order for five 15,000 DWT units for delivery in 2014 to an yet unknown buyer.
Tanker newbuilding activity this week has been focussed on the coated sector with IMT placing an order for two firm and two option 7,000 DWT product carriers at Weihai Samjin, with the firm vessels due to be delivered in 2014. Scorpio have announced to the market they have further extended their investment in MRs and ordered two firm 50,000 DWT chemical/product tankers at Hyundai Mipo. Pricing for these units has been announced at USD 32.5 Mill per vessels and delivery in May & June 2014. The deal includes a further four options for 37,000 DWT vessels, again for delivery in 2014.
In Containers, Seaspan declared four further options for 10,000 TEU vessels at Jiangsu New
Yanzijiang, taking the total to 11 vessels in the series of orders. Pricing is in the region of USD 90 Mill with delivery planned for 2014. Reports also indicate that Pacific International Lines has taken up four further options for wide beam 3,900 TEU vessels, making a total order of eight at Dalian Shipbuidling. This deal is understood to have actually been concluded in 2012 with details only now coming to light. The vessels are reported to be priced at circa USD 41 Mill with delivery in 2014.
Finally and in addition to last week’s ordering activity in the gas carrier market, Wuhan Nanhua has received an order for one plus one 4,600 cbm LPG vessels for delivery in 2014 to an unknown Domestic buyer.
S & P
A Kamsarmax resale the M/V GRANDA M (82,000 dwt 2012 blt Jiangsu Eastern) originally ordered by Swiss owners, is reported sold by the builders to Singapore based buyers for US$ 20.7m.
In the Panamax sector the M/V GOLDEN GLORY (70,296 dwt 1996 blt Sanoyas) after her failed sale back in July at region US$ 9.5m, has now reported sold for US$ 6.5m most probably to Chinese buyers.
An increased activity in Supramax/Handymax sector noted this week.
The M/V KT VENTURE (55,868 dwt 2007 blt Kawasaki) has reportedly been sold by clients of Nagashiki Kisen to unnamed Greek Buyers for a price of US$ 18.5m while the Turkish-owned M/V BAYTUR (52,261 dwt 2001 blt Daedong) reported sold at US$ 13.6m to Indonesian buyers.
The CH. F. Ahrenkiel controlled M/V NORMANNIA (42,648 dwt 1997 blt I.H.I.) understood to have been sold at a relatively firm US$ 8.9m, to Greek interests. Understand that the obtained price is reflecting the good class position of the ship as she had passed her ss in July 2012.
Finally, in the handysize sector, 2 x resale “Trader” class handysize bulkers have been sold by clients of Tsuji Heavy Industries to undisclosed Greek buyers. The vessels, which are 30,000 dwt and which will deliver from the yard during 1st quarter 2013, are understood to have achieved a price of US$ 17.5m each which includes the installation of log stanchions.
In the wet S+P front, the Salamon’s VLCC “MERIDIAN LION” (273,769 dwt 1997 blt Hyundai) reported sold for a price in excess of US$ 26m to Russian oil company Rosneft.
Elsewhere in the market the zinc coated methanol carrier M/T SHOKO MARU (30,952 dwt 1998 blt Minami Nippon) has been sold to Middle East based Buyers at region US$ 8.8m. The capability to carry Methanol has proved an advantage in recent months with Buyers offering a significant premium on the price over standard product tankers in order to secure the tonnage.
In the LPGs the Japanese owned “MORNING AIR” (5,020 cbm 2010 blt Nakatani) has gone to Chinese buyers for US$ 19m while Middle Eastern buyers have paid US$ 13m to purchase the “GASCHEM BERGEN” (8,239 cbm 1991 blt Brand Werft).
Further to last week’s VLCC orders at HHI, China Merchants Energy Shipping (CMES) are reported to have ordered three plus three 320,000 DWT VLCCs at SWS for a price in the region USD 84‐85 Mill and delivery from end of 2014. In the products sector, Clients of Metrostar Management have contracted six firm plus four option MR tankers from SPP in Korea for delivery again from end of 2014.
These vessels replace a previous order for four 3,600 TEU container vessels originally placed by Metrostar in 2010. Clients of Stena meanwhile are reported to have declared the 7th and 8th options in their series of 50,000 DWT chemical parcel tankers at GSI with a price believed to be in the region of USD 38 Mill per vessel and delivery set for these latest units from the end of 2015. They are understood to still hold an additional two options for further vessels with the yard.
There has been significant activity in the container market led by an order for five option five 14,000 TEU vessels from Seaspan Corporation at HHI. Delivery for the firm vessels is planned for within 2015 and all the vessels have a reported price tag in the lower USD 100 Mills. These Vessels will be chartered to Yang Ming Lines for a 10+2 years. HMD, have signed to build one plus one x gearless 1,000 TEU ships, with the first Vessel set for 1H 2014 delivery for Clients of Nam Sung Shipping. The price is understood to be around USD 17.5 Mill be Vessels, which whilst does set a new lower benchmark, we are led to believe that the ship is for a repeat or an older design to take advantage of the early delivery berth.
In other sectors, Evergas have placed an order at Qidong Dajiang Shipbuilding for four 30,000 cbm LNG/Ethylene/LPG vessels for deliver in 2015. Finally, Hoegh Autoliners have reportedly placed an order for three 8,500 unit car carriers with Xiamen Shipbuilding for delivery in 2015.
At times last year, it looked as if shipyards would again defy the odds and record another year of record output. That is what we were forecasting mid-year when deliveries were up over 10%, but in the end the forecast was wrong (not for the first time!) and the yards pulled up just short at 152m dwt. Still, a remarkable performance in the circumstances. Peaking Out
So which year will mark the peak of the shipbuilding production cycle? The rather geeky answer is that it depends on the unit of measurement – in CGT terms the peak year was 2010 but 2011 comes out on top if dwt is applied (reflecting the dominance of relatively simple to build bulker deliveries over the past eighteen months). Nevertheless, after ‘plateauing’ out at record levels since the turn of the decade, it does now look like production is set for a significant downturn.
Managing the Descent
Of course, while production has remained high, yards have had it tough ever since the market downturn hit in 2008. Despite an unexpected (and for the markets perhaps unhelpful) run on bulkers in 2010, order volumes have been running at around one third of the levels of the boom years, as tonnage surplus and a finance squeeze have bitten. Contracting in CGT came in 37% down y-o-y in 2012, with an average lead time of just 22.4 months. This led to a run down in forward coverage (the current orderbook represents 1.7 years of current production compared to 3.5 years in 2008) and many marginal yards failing to secure new business (540 yards took new orders in 2007 compared to 209 in 2012).
Besides lower order volumes and weaker prices, yards have had to adjust to a significant change in product mix. The contract value of the offshore orderbook ($139bn) has grown to almost the same levels as the merchant orderbook ($169bn), while there has also been relatively more ordering in the gas, car carrier, products and chemical markets where fundamentals are generally better than in the big volume sectors. Whatever the exact output in coming years, it will involve relatively more niche business, along with the different technical and management challenges that come with these products. Add in the challenges of developing eco-designs and price discounting to tempt counter cyclical ordering and most yards and suppliers go into 2013 facing tough times and looking closely at strategy.
The latest forecasts from the World Shipyard Monitor suggest shipbuilding output will drop by around 15% this year, with a further major drop in 2014. Forecasts have been wrong before and further order runs are possible, but it does look like it will be a while before we are discussing record output again. Tough for shipyards operating in one of the most challenging businesses around but certainly what the market needs to help it get back on track.
2012 saw a record 57.5m dwt scrapped globally. This was a y-o-y increase of 34.9% in demolition volumes, and compares to an average of 19.5m dwt demolished from 2005-2011. This month's Shipbuilding Focus looks at where tonnage has been recycled over recent years. Breaking it up… As illustrated by the Graph of the Month, demolition volumes have increased substantially following relatively low levels of scrapping during the shipping market boom from 2004-08 when even older tonnage was finding employment. Since the onset of the recession in late 2008, oversupply in the major markets, a poor earnings environment and a greater propensity to remove over-aged and inefficient tonnage from the fleet, have increased demolition activity. In 2012, India, Bangladesh, and Pakistan, traditional recycling destinations, took record scrap volumes of 19.4m dwt, 13.7m dwt and 10.1m dwt respectively. In China, demolition totalled 11.1m dwt in 2012, and Turkish breakers contributed 41.2% to the 3.2m dwt scrapped by ‘Other’ nations.
Packing it away…
Pakistan’s share of demolition volumes has varied widely over the last decade. Economic and political instability, as well as severe flooding in 2012, have limited Pakistani breakers’ activity, particularly in 2004-08, when its average share of global demolitions fell to 4.2%. However, greater stability in 2012 has seen their share of global scrap volumes increase to 17.6%, up by 5.5m dwt y-o-y.
Bangladeshi breakers took the second largest share of scrap volumes, 23.8%, in 2012. This share has fallen since 2004-08, when it averaged a 58.4% share. The reduction in share has been caused by environmental disputes and court action which limited Bangladeshi breakers’ activity. However, as these issues subsided, they scrapped 13.4m dwt in 2012, despite a shortage of dollars limiting the availability of Letters of Credit. Meanwhile, Indian breakers’ share of scrap volumes has been fairly constant since 2007, when it rose by 10.3% to 24.8%. In 2012, despite a volatile rupee, Indian breakers took 32.6% of global scrap volumes, making it the top demolition destination for the third year in succession.
Selling it on…
In 2012, Chinese demolition volumes reached their highest level since 2003, accounting for 18.9% of global scrap volumes. As the lines on the graph show, the Far East and Indian Subcontinent scrap metal price differential had once disadvantaged Chinese breakers, however, between 2007 and 2009 the differential declined from $260/ldt to $20/ldt raising Chinese breakers' share of scrap tonnage from 5.7% to 19.4% respectively. Proposed incentives for Chinese owners to scrap domestically and the environmental credentials of its breakers, could see their share of global scrapping rise in coming years.
Looking ahead to 2013, challenging market conditions promise another busy year for shipbreakers. However, as this analysis shows, who will benefit from this is far from clear. With Pakistan and Bangladesh regaining ground, and greater competition from Chinese breakers, along with India's consistent strength, there could be a real scrap for market share.
S & P
Having invited offers on 21st December we now understand that 4 x newbuilding resale VLOC’s (263,000 dwt) delivering from HHI and Hyundai Samho (two each) in 2013 have now been sold by the shipyard to an undisclosed far eastern buyer for a price in the region of US$ 55m each.
In the panamax market the Japanese controlled M/V DIAMOND STREAM (76,741 dwt 2006 Sasebo) has been sold to Chilean buyers for a solid price of US$ 17.5m, the Vessel was previously in the market in August 2012 however a sale failed to materialise. The Japanese controlled M/V KONMAX (72,270 dwt 2000 blt Imabari) reported sold at US$ 10.5m.
There is some modern supramax activity to report this week, the Chinese controlled Dolphin 57’s M/V CHRISTINE STAR and M/V HARMONY STAR (56,850 dwt 2011 blt Cosco Dalian) have been sold to unknown buyers for a price in the region of US$ 17m each. Clients of Precious Shipping have purchased two Indian built Diamond 53’ supramax units M/V GOOD PRECEDENT and M/V GOOD PRIDE (53,840 dwt 2011/2010 blt Hindustan) for US$ 14.25m and US$ 13.25m respectively.
Other business includes the sale of the handysize M/V KEN JYO (23,583 dwt 1996 blt Saiki) for US$ 4.8m.
There are a number of sales to report since we last went to press in the tanker S&P market.
The VLCC “MAYFAIR” (298,405 dwt 1995 blt Daewoo) is sold to undisclosed buyers for US$ 23.5m. In the Aframax sector we have seen 2x sister ships sold by the mortgagees to Greeks at excess US$ 30m enbloc ‐ both Vessels were sold with SS/DD freshly passed, namely the ex 'BRITISH HAWTHORN' & 'BRITISH LAUREL' (106,500 dwt 2003/2002 blt Tsuneishi Zosen).
The activity in the products sector continued over the Christmas Period with two post 2000 built vessels sold for prices which continue to show signs of an underbelly of strength in the market. Both ships sold were pumproom types with no imo notation. Namely the M/T FREJA DANIA (53,755 dwt 2007 blt Shin Kurushima) has been sold to Investment buyers at US$ 20.5m and the M/T LOTUS EXPRESS (45,789 dwt 2003 blt Minami Nippon) was sold to Greek buyers at US$ 14.5m understand basis ss/dd due.
2012 was certainly a challenging year for the conventional newbuildng market. End 2012 results for
the major Korean yards struggled to meet targets, with HHI 23% down on its 2011 results and only
DSME reported to have met their 2012 target of USD 11 Billion. The focus for the Big 3 Korean yards
is likely to again veer more towards offshore in 2013, with increasing management and physical
capacity being committed to this sector ‐ however with a low volume of large asset class
conventional ordering in 2012 and a heavily weighted reliance on the offshore markets to deliver new
orders and fill capacity, there will certainly be some pressure and opportunity for business here in 2013 for the conventional markets, albeit against a continually challenging economic and trading environment.
In China and despite a push for diversification away from conventional sectors into the potentially more profitable offshore and gas markets, there still remains a significant focus on their bread and butter business of Dry. Values in this sector have remained flat for some time now and there are no immediate signs that the Chinese yards are gearing for another push down on price to leverage new business. With Dry orderbooks now starting to diminish and new eco‐efficient designs available at competitive pricing, it will be interesting to note whether values have plateaued for long enough to bolster confidence and catalyse further activity in this sector.
Since our last report there has been notable activity in the Tanker newbuilding market. Clients of India’s Great Eastern Shipping have signed a single MR newbuilding at STX Dalian for delivery late 2015, with options for further additional sister vessels. Responding to the low ordering levels since 2010, BP have placed an order for 10 Aframax and three Suezmax tankers at STX Offshore & Shipbuilding, reportedly worth USD 694 Mill for the firm units. With delivery from late 2014 to 2015, BP reportedly have options that could take the deal up to USD 1.1 Bln.
Having experienced the first year since 1987 when the BDI averaged below 1000 points, there was some positivity as a number of year end Dry Bulk orders were placed. Clients of Thenamaris are reported to have placed an order for two 180,000 DWT capsize vessels for delivery 2014 at SWS which we understand is to replace the previously ordered singular VLCC in 2010. To start 2013 Jiangsu Ocean Shipping (JOSCO) have signed a contract for two 61,000 DWT bulk carriers at NACKS also for delivery in 2014.
In the gas sector, Clients of Ultragas have ordered two semi‐ref 22,000 cbm LPG vessels from STX SB, with Clients of Tomza following suit with an order for a single 82,000 cbm VLGC unit at HHI reportedly costing USD 73.50 Mill. Both orders are due for delivery in 2014. Client of Maran Gas have ordered four firm plus two 174,000 cbm LNG vessels at Hyundai Samho for a reported USD 210 Mill each with delivery in 2015. Clients of Brunei Gas Carriers have ordered a single 154,800 cbm LNG unit at HHI with delivery again in 2015, pricing for this order is as yet unknown.
In other sectors, Royal Caribbean places an order for one plus one 225,000 GT Oasis class vessels with STX France at USD 1.32 Bln per Vessel. In small tankers, it has now come to light that United Petroleum have placed an order for four 7,000 DWT product tankers with Russia’s Krasnoye Sormovo Shipyard with delivery dates in 2013.
S & P
In the Panamaxes the K‐Line controlled M/V FREIA (74,269 dwt 2003 blt Oshima) reported
committed at a price of US$ 13.9m to Greek buyers with delivery early 2013. Buyers waived physical Inspection. The vessel will pass special survey and drydock in January and the sale is basis these being freshly passed.
M/V TPC ARIRANG (71,535 dwt 1994 blt Hitachi) has been sold for US$ 7.2m to S. Korean buyers with financing provided by the Sellers, KEB Capital.
Two older Handymax ships reported sold to Chinese buyers; namely the M/V DESERT WIND (42,294 dwt 1985 blt Mitsubishi) for US$ 3.3m and the M/V DD LEADER (25,759 dwt 1985 blt Imabari) at US$ 2.55m.
In the Tanker S&P market, Interest remains strong, particularly within the Aframax and MR sectors. Clients of Dunya in Turkey have now sold the coated Aframax M/T GAN-DESTINY (112,793 dwt 2010 blt SPP) for region US$ 33.5m and the same age sister M/T GAN-DIGNITY at region US$ 31.5m. Both ships went to Greek buyers.
In the products sector, the ex‐Seaarland Handysize Tanker M/T LIHOU (38,511 dwt 2005 blt
Guangzhou) has been sold to Greek buyers at US$ 12.5m. The ship had been under arrest for some time and was eventually sold by the lead mortgagee bank.
The MR M/T HARUNA EXPRESS (45,761 dwt 2004 blt Minami-Nippon) after attracting a large number of inspections in Singapore, reported sold to Hong Kong based buyers ‘Island Navigation, at US$ 16.3m.
As we enter December and the final few weeks of the year, one could be forgiven for thinking that the shipbuilding market would begin to quieten down. Though enquiry does remain a little subdued, the week has seen further reports of new business being concluded, with vessels being ordered across a wide spectrum of sectors and this should provide those (yards) still aiming to hit their yearly order targets a little optimism and potential festive cheer.
In China, the yards continue to remain hungry for business and further ordering has been reported this week in both the tanker and dry bulk sectors. We have seen reports that Cosco Dalian has added to their initial order from last month (at Guangzhou Longxue) by placing a further order for 2+2 x 300,000dwt VLCCs, this time placed with Dalian Shipyard (DSIC). Again pricing is understood to sit in the low/mid USD 80s Mill and deliveries will be from 2H 2014. In other sectors, Precious Shipping is understood to have placed an order at Shanhaiguan shipyard for 2 option 1 x 20,000dwt Cement Carriers. This order is understood to have been signed at a price of USD 24.18 Mill per vessel and delivery is scheduled from 2014 onwards.
In Japan, the dry bulk market continues to remain the most oft‐discussed sector with many of the yards understood to be in close discussions for their latest designs ‐ these discussions are understood to be taking place not only in the small and mid‐sized sectors, but up amongst capsizes too. With the yen having weakened against the dollar by over 6% since September, there is certainly some cause for cautious optimism. If this depreciation can continue, then we expect to see a more concerted effort from the yards to compete for new enquiries and will make the next few months very interesting indeed.
In terms of other reported business; General Dynamics NASSCO are understood to have placed an order in US shipyard TOTE for 2+3 x 3,100 TEU Containerships. These vessels are the first of their kind worldwide, in that they will be the first containerships to utilise the MAN B&W Dual fuel engine and will have the capacity to burn LNG as an alternative fuel. These vessels are expected to deliver from the end of 2015 and pricing has been reported at USD 70 mill per vessel. Finally, Fincantieri have announced that they have won an order from Viking Ocean Cruises for 2+2 x 48,000 GT Cruise ships. The vessels are expected to deliver within 2016. No pricing has been disclosed.
S & P
We understand that the two of the three Vogemann Cape sizes have been concluded separately to undisclosed buyers at levels in excess of US$ 19 mill each - namely M/V BULK EUROPE and M/V BULK ASIA (170,000 dwt, 2001 blt Sasebo).
The Korean controlled geared panamax M/V YONG JIN (71,747 dwt 1995 Hitachi) has been sold for US$ 6.75m to Chinese buyers.
A Diamond 53 design resale unit being built at Nam Trieu Shipbuilding in Vietnam M/V OCEAN QUEEN is sold at US$ 15m to Far Eastern interest; the vessel had been ready for delivery at the shipyard for some time pending sale.
The Tess 45’ type handymax M/V KS EXPRESS (45,734 dwt 1994 blt Tsuneishi Zosen) has been sold for US$ 6.4m to Indonesian buyers.
In the Tanker S&P market, the VLCC “SAMCO AMERICA” (304,996 dwt 2003 blt Hyundai) reported sold to Greek interests for US$ 37.5m.
The IMO III MR M/T MOSKALVO (45,999 dwt 1998 blt Daedong) is sold at US$ 11.6m to Chinese.
The Newbuilding market has seen further activity this week with various orders being reported placed across the specialised tanker and dry bulk sectors.
There is no doubt that 2012 has been a challenging year for many of the shipyards ‐ with the global economic environment and its subsequent effect on financial liquidity playing its part to hinder would -be buyers. With this in mind, we have seen many shipyards, including those in China, shift their marketing strategy away from the simple conventional dry bulk markets, into increasingly more diversified or niche product ranges.
In China, this strategy has been highlighted this week with two noteworthy orders. We have finally seen the long mooted order at Hudong Zhonghua being signed with Stolt Tankers B.V. (a subsidiary of Stolt‐Nielsen Limited), who have announced they have placed an order at the yard for five firm units of 38,000dwt Stainless steel chemical tankers. These vessels are due to deliver from Dec 2015 onwards and the deal is understood to include a further three optional units. Pricing is understood to lie in the region of USD 73 Mill per vessel. Another deal in China being reported is that of Jo Tankers order at Nantong Mingde. Jo tankers are reported to have ordered 2+2+2+2 x 33,000dwt Stainless Steel tankers at the yard, which will replace the previous 4 options the owner held from their deal last year for 2 x 30k tankers. These latest units will begin delivering from 1H 2015 onwards. No pricing has been disclosed.
In Japan, the additional challenge that the yards have (until recently) had to face, has been that of a steadily strengthening Yen. Fortunately the past month or so has begun to see this pressure relent somewhat and the yen has depreciated against the dollar to the point where it is trading at its highest level since March this year. With signs that this may continue, against speculation the BOJ will increase stimulus to spur inflation, this will increasingly benefit the yards going forward and hopefully help them to compete on a more level footing with their rival nations. Within this week it has emerged that Tai Chong Cheang, of Hong Kong have placed an order at Imabari for 1+1 units of their 76,000dwt Panamax bulk carrier design. The vessel will deliver in 2014, though no pricing has been disclosed.
Finally and amongst other reported business, it is understood that COSCO Guangdong have won an order from an as yet undisclosed European buyers for a pair of 35.5k Handyszie Bulk carriers at a price of circa USD 20.5 Mill per vessel. These units are provisionally scheduled to deliver from 2H 2014 onwards.
S & P
In the cape segment, the M/V C FRONTIER (176,000 dwt 2012 blt Jiansu Rongsheng) is reported sold for US$ 34.5m to Zodiac.
Geared Panamax M/V CIELO LUCIA (73,852 dwt 1999 blt Sasebo) has been purchased by Chinese buyers for region US$ 10m, while the grearless M/V TARANG (70,321 dwt 1989 blt) sold for US$ 4.15m.
Buying interest in Handymax/Supramax, 8-12 years old bulker remains very high, especially from Greek owners. This week we can report the sale of M/V CURIA (51.029 dwt 2001 blt Oshima) for region US$ 13.9m to Greeks interests who waived physical inspection. The M/V MAHA AVANTI (43,469 dwt 1991 blt Tsuneishi) reported sold to Greek buyers for US$ 5.8m.
In the Tanker S&P market, the medium range tanker M/T HOUYOSHI EXPRESS (47,999 dwt 2004 blt Iwagi) has sold to Greek buyers for US$ 14m. The stainless steel chemical tanker M/T RASAWULAN (10,332 dwt 1996 blt Asakawa) is sold to undisclosed buyers for region US$ 5.5m. The two small pressurized LPG tankers “PACIFIC GAS” and “BORAL GAS” (2,300 cbm 1991 blt Fulton Marine) have been sold to Vietsa, Vietnam for US$ 2.35m each.
This week, we have again seen further ordering across the various conventional asset classes, however it is interesting to note that the PCTC sector has again won further orders. We have already seen 25 firm Vessels contracted this year in the 3,500-7,300 CEU sector and with further options due to be declared within the end of this calendar year, we might see this number creep into the 30’s. This will be the most significant ordering in this sector in recent years, with only four firm vessels ordered last year, 21 in 2010 and 12 in 2009. As we have seen in the other conventional sectors, the ship designers have been working hard and have made significant reductions in the fuel oil consumptions of these new orders compared to the Vessels already on the water. The main debate amongst the owners and operators has been over choosing a panamax (sub 7,000 CEU) or a post-panamax beam design and to this date, the more traditional panamax beam design parameter has been the one to attract the most orders.
In terms of reported business; In the aforementioned car carrier market, STX are reported to have won an order for two option two x 6,500 CEU PCTCs. These have been ordered by clients of Zenith Partners Korea Co. and will be built at STXs main facility in Jinhae, Korea. The two firm units are scheduled to deliver in 2015 and pricing is understood to stand in the region of USD 65 Mill per vessel. Hyundai Mipo meanwhile are understood to have won a further order from the Grimaldi Group for a further pair of 28,600dwt Con-Ros. These are understood to be the declared options from their original deal for 3 units signed in September, bringing the number of vessels ordered in the series to five in total. The latest pair are also expected to deliver in 2015 and pricing understood to stand at circa USD 70 Mill per vessel.
In containers, Hanjin are reported to have won an order from clients of NSC Holding GmbH for a pair of 9,000 TEU container carriers. The deal is understood to hold options for up to as many as four additional vessels and pricing has been reported at USD 81.65 Mill per vessel. The two firm units are provisionally to be scheduled to deliver in Jul & Sep 2014. Part of the funds for this order will have come from the money Clients of NSC left behind from their cancelled order for four 13,000 TEU Vessels back in the peak of the market in summer 2007.
Finally in Dry, it was reported that U-Ming had ordered a pair of wide beamed 84K Bulk carriers at Oshima Shipbuilding for delivery in 2H 2014. The vessels were reportedly contracted at a price of circa USD 33.5 Mill which whilst seems somewhat rich, we understand this deal was concluded earlier this year, hence not only the price but the relatively early deliveries.
S & P
It has been a busy week in the drycargo S+P market.
In the Capesize sector, it is being reported that clients of Berge Bulk have acquired the M/V CAPE CAMELLIA (172,502 dwt 2000 blt NKK) in a direct deal from K-Line for a price of US$ 17.5m. This is in fact an older deal, however the price is still in line with the recent sale of the “GREAT PHEASANT” which was committed last week for the same levels. An older capesize, the M/V CAPE AUSTRALIA (149,512 dwt 1990 blt CSBC) has been sold in a trading deal for US$ 7m to clients of Winning Shipping.
Trade & Transport are reported to have purchased the Kamsarmax sister vessels M/V NORD AQUARIUS (81,800 dwt 2011 blt Guangzhou Longxue) and M/V NORD AQUILA (2012 blt) for US$ 43m en bloc.
The M/V NORD MERCURY (77,171 dwt 2008 blt 2008 Oshima) was sold in a quick, offmarket deal to client of Oldendorff Carriers for a reported price of US$ 18.4m. It is understood that the Buyers waived inspection of the ship.
Elsewhere in the panamax sector, the M/V HALO CYGNUS (73,937 dwt 1998 blt Tsuneishi) is
understood to have been sold by Mitsui O.S.K. to Greek buyers for US$ 8.7m while the M/V MARINA WAVE (69,451 dwt 1992 blt Hashihama Zosen), has been sold for US$ 5.1m to undisclosed interests.
In the handymax sector the M/V IZOLA (45,916 dwt 1997 blt Halla) has been committed by
clients of Splosna Plovba to Greek buyers for a price of US$ 9.5m.
There is very little in terms of sales activity to report this week in the Tanker S&P market.
The M/T SAFFRON I (32,040 dwt 1999 blt Daewoo) has been sold to traders specialising in West African business at US$ 8.2m basis a prompt charter free delivery. The ship was particularly shallow drafted with decent cubics which make her suitable for trade in the Nigerian region.
The IMO II/III sister vessels M/T DIPLOMAT and M/T NEGOTIATIOR (13,000 dwt 2007 blt Sekwang) reported sold to buyers in Turkey for US$ 12m each.
The week has seen further reports of business being concluded - and whilst the direction of these reports remains primarily toward the Container sector - we continue to see general enquiry across the market, with the focus still on fuel efficient tonnage regardless of the sector in question.
The challenges being faced by the shipyards this year are well known and as reported last week the overcapacity of supply from the yards has certainly contributed to the softening of pricing witnessed throughout the year. In an effort to counter this we continue to see a shift in the strategies of the yards. Many having increasingly looked to limit or slow down their production processes to help alleviate this supply driven pricing pressure and across the regions, including within China, we have seen an increasing drive to broaden product ranges to help alleviate any single sector reliance. It will be interesting to see within the remainder of the year, whether these strategies reap dividends and pricing holds at a more steady level through till year end.
In terms of ordering; In Dry, Norden announced that they had recently placed an order for an ice classed Panamax Bulker within Japan. No other details have yet been released and they have declined to name the yard in question. As has been the case in recent years, the Dry bulk market has remained a key focus for Japan and this year has now seen over 60% of their 2012 orderbook being placed within this sector. The Japanese yards continue to remain at the forefront of efficient design development and this will continue to be a key factor for them as they work to overcome not only the existing challenges of the global market but the additional challenge of the continuing strength of the Yen.
As mentioned however, the bulk of the reported business this week has been within the Container sector; Clients of Aeolas Management are understood to have placed an order at Hanjin Subic, in the Philippines, for 2 x 6,800 TEU container carriers with delivery of both vessels scheduled within 2014. Pricing of these two vessels is understood to stand at circa USD 57 Mill per vessel. STX Shipbuilding meanwhile are understood to have won a new order from Korea Marine Transport Co. (KMTC) for 1+1+1+1 x 5,000 TEU containerships. The firm vessel is provisionally scheduled to deliver within 1H 2014 and pricing is understood to stand at USD 44.5 Mill per vessel. In addition to this STX have also announced they have agreed to switch an existing order for an existing client of theirs (understood to be Fratelli D’Amato) from 1 VLCC to 2 x 9,200 TEU Container ships at STX Jinhae. A new contract price of USD 176.3 Mill for the pair has been announced, although the new delivery position has not
S & P
It has been a busy week in the drycargo market across all sectors, a strong indicator that the current levels are a buy in for many owners, which is also leading to increased competition on the ships being marketed for sale.
In the capesize market this week, the Japanese controlled M/V GREAT PHEASANT (178,820 dwt 2000 blt Hyundai) is reported to have been sold to Greek interests at levels in the mid 17’s. Moreover, undisclosed buyers are reported to have purchased the M/V AQUABELLA (161,010 dwt 1995 blt Hyundai) for a level in excess of US$ 11m with DD freshly passed.
In the panamaxes, the geared panamax M/V PACIFIC PIONEER (69,279 dwt 1994 blt Hashihama) has been sold to Chinese interests for US$ 7.2m.
Undisclosed Greek buyers have acquired the handymax M/V CB ADVENTURE (46,232 dwt 2002 blt Oshima) for a firm level in the mid 13’s.
The handies has also seen a significant amount of activity this week. Clients of Norden have three modern handysize bulkers, namely the M/V NORD AARHUS, M/V NORD ANTWERP and M/V NORD DUBAI (all about 33,230 dwt 2012, 2011 and 2011 blt respectively in Hyundai Mipo) for an enbloc price of US$ 60m to clients of Dalex, Greece. Elsewhere in the handies, the M/V SPEAR FLOWER (29,738 dwt 2003 blt Shikoku) has been sold for US$ 11.2m to clients of Pacific Basin while the older M/V ACE BRIDGE (28,419 dwt 1999 blt Imabari) has been sold to Greeks for US$8.5m.
In the Tanker S+P market, following a lengthy sales process the new building resale LR2 M/T WHITE STARS (114,700 dwt 2012 blt Samsung) she may have finally been committed to Greek Buyers. It is interesting to note that in the early stages of the process the ship struggled to receive indications in excess of US$ 40m and yet we now understand that a sale may have been agreed in excess of US$ 42m.
The M/T PACIFIC HARMONY (69,999 dwt 1999 blt Namura) reported sold to Bumi Armada for a price in excess of US$ 10m.
In the MR tankers, the Morfini-owned product carriers, M/T FANTASIA and her sister M/T ELECTA (51,433 / 51,118 dwt 2009 blt SLS) are committed to Mexican interests at US$ 28.5m each on subjects.
The LPG carrier “BRITISH CONFIDENCE” (54,490 dwt 2006 blt Mitsubishi) has been concluded at US$ 55m to undisclosed buyers.
It has been a quiet week in the Newbuilding market with levels of new enquiry remaining relatively subdued and very few orders. This is not to say however that the market has been completely devoid of activity, but yet again that activity has been concentrated in the more niche areas of the shipping markets, such as Offshore, RoRo and the PCTC markets.
As has been previously mentioned many times, yards globally have had to come to terms with how to fill capacity after their rapid expansion over the past few years, and more and more have had to branch out into new areas to keep themselves fed in these lean times. With this in mind, we have continued to see a softening of pricing as the yards try and bring about a new supply/demand equilibrium where owners will again begin ordering, whilst trying to take what meagre offerings are currently available in the marketplace! However, with yards continuing to suggest they are now offering berths at direct cost, it remains to be seen how long this pattern can continue for or whether a new round of consolidation begins amongst the yards, as the on‐going challenges of the current market further takes its toll.
Korea has had more success than others in 2012 in managing to diversify into new areas and many of the major yards have continued to announce new business within the Offshore sector particularly and look to be making strong progress towards their order targets for the year end. With so much of the major yards revenues last year made up of these offshore projects, it continues to look like 2012, as predicted, will follow the same pattern.
In terms of reported business, Tskaos has returned to Sungdong to place an order for 1 option 1, 157,000 DWT Suezmax shuttle tanker with delivery pencilled in for October 2014. Hyundai Mipo have also reported with much fanfare the successful order of a 35,000CBM LPG Carrier from Japanese owner, JX Shipping with delivery expected in July 2014.
After rumours back in early October, it now appears that Siem Car Carriers have confirmed 2 option 6 x 6500 ceu PCTCs to be built at Weihei Samjin Shipyard with the first delivery expected in 2014.
Lastly, STX Finnyard have been able to announce that clients of Tui Cruises GmBh have now declared their option at the yard at a reported price of USD 607.5 million with delivery expected in 2015.