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2012-07-02 11:45:16

The week has been marked with a record high demolition business surpassing the number of 20 disposals, while a vast majority of deals are old that just came to light, while owners do not loose their momentum for scrapping and eyeing on secondhand units as asset prices remain at the bottom low. The highest activity has been seen in the newbuilding market with offshore units monopolizing investors’ interest and a quite firm business in the construction of bulk carriers due to the evolution of new eco designs.
Overall, 46 transactions reported worldwide in the secondhand and demolition market, up by 4.5% week on week with an 81% increase of activity in the demolition market and 125% increase in the secondhand buying appetite of dry bulk carriers. At similar week in 2011, the total S&P activity was 46% lower, when 25 transactions had been reported and secondhand ship purchasing activity was 70% lower than the ordering business.

SECONDHAND MARKET
Dry bulk carrier segment is on the spotlight with interesting capesize transactions. A capesize of 176,000dwt built 2012 China reported sold for $38mil, when in October 2011 a capesize units of 177,000dwt built 2011 China had been reported sold for $49,5mil. In addition, a capesize of 172,846dwt built 1999 South Korea reported sold for $15,2mil, when in March of 2011 a 171,846dwt vessel built 1996 Japan had been reported sold for $23mil.
Overall, 17 vessels reported to have changed hands this week at a total invested capital in the region of US$ 186,8 mil with bulk carriers holding the lion’s share, 53% of S&P activity, and tankers 18%. In terms of the reported number of transactions, the S&P activity is down by 39% from last week’s activity due to zero reported deals in the offshore segment, and up by 6.2% comparable with previous year’s weekly S&P activity, when 16 vessels induced buyers’ interest at a total invested capital of about $118 million, with bulk carriers holding 44% of the total volume of S&P activity and tankers 19%. In terms of invested capital, the bulk carrier appears the most overweight by attracting about 66% of the total amount invested from firm buying appetite in all vessel sizes and ages, from handysizes to capesizes.

NEWBUILDING MARKET
In the newbuilding market, one notable corporation deal came to light this week with OAO United Shipbuilding Corp. planning to start construction of a 60 billion-ruble ($1.8 billion) shipyard with South Korea’s STX Corp. next year, said Roman Trotsenko, the head of the Russian state company. The facility will be able start building oil and liquefied- natural-gas tankers in 2015, drilling platforms in 2018 and military ships in 2020, Trotsenko told reporters today at the St. Petersburg International Economic Forum. STX will acquire 25 percent of the St. Petersburg shipyard, which will be set up as a joint venture, Trotsenko said. United Shipbuilding will provide most of the funding, and STX will deliver technological know-how, Trotsenko said.
In terms of volume of transactions, there has been also a week with hot business in the offshore segment and interesting deals in the main conventional vessel segments. South Korean yards are still winning high valued ordering activity leaving behind Chinese and Japanese counterparts, while in the bulk carrier segment the eco friendly design has been very popular for construction giving a boost of ordering in the struggling shipyards. South Korean yard STX O&S is said to have clinched newbuilding contracts for up to 10 boxships of 5,000 TEU and one LNG carrier 160,000 cu.m at a total value of $650mil. One more notable order has been viewed in the offshore segment with South Korea’s Samsung Heavy Industries confirming that it has received an order for an additional DP3 ultra deepwater drillship, like its sister ships, from US offshore operator Ensco, at a value of $645mil, being the seventh Samsung DP3 drillship in the Ensco fleet, for delivery during the fourth quarter of 2014. Chairman, President and CEO Dan Rabun said, “Our decision to order two ultra-deepwater drillships over the past three months is predicated on detailed analysis of several important factors. Customer demand has continued to rise and has become even more broad-based due to new discoveries in emerging basins. The near-term supply of deepwater rigs is limited and we believe supply-demand dynamics will continue to support favourable day rates, which have risen sharply over the past year. Significant interest in our latest-design drillships gives us confidence that customers recognize the technological advantages of our drillships relative to competitors and the benefits we provide from rig standardization.” In the passenger/cruise segment, Xiamen Int. Cruise has sealed an order for a passenger unit of 100,000gt at Xiamen SB of China with delivery in 2018 at a cost of $487,6mil.
The week ended with 36 fresh orders reported worldwide at a total deadweight of 442,700 tons, posting a 35% week-on-week decline with a 300% increase on LNG ordering activity and 43% lower volume of offshore newbuilding contracts. Special project vessels are holding for one more week the lion share, 47%, of the total newbuilding activity, while dry bulk carriers follow with a 19% share. This week’s total newbuilding business is down by 33% from similar week’s closing in 2011, when 54 fresh orders had been reported with containers grasping again the lion share, 46% of the total newbuilding business, bulk carriers 26% and special projects were holding 18.5% of the business compared with 47% share today’s levels. In terms of invested capital, the total amount of money invested is estimated at region $1,8 billion with 66% of the total number of orders being reported at an undisclosed contract price. The offshore segment is the most overweight by holding 50% of this week’s total amount of money invested due to the high valued order of $650mil for an ultra deepwater drillship from US owner Ensco and passenger cruise follows with the $487,6 mil from Xiamen Int. Cruise of China.
In the bulk carrier segment, Oldendorff group is quietly planning an initial public offering to build 16 or even 28 newcastlemax units at Shanghai Waigaoqiao Shipbuilding of China at a total price of over $1,3billion if all 12 options are exercised. In addition, Japan’s Mitsui OSK Lines is planning to order the first of a new generation super efficient 200,000dwt ore carrier with domestic shipyards as a new design the so called “Handy Ore Carrier” (HOC). The HOC would focus on “3S”: Shallow Draft, Swift Unloading and Save Energy. Unlike very large ore carriers of 300,000-400,000dwt, the HOC with a draft below 17meters intends to call at shallow water harbors worldwide. MOL officials indicate that the order could be for up to 10 ships despite the distressed freight market status and the added technical characteristics could lift the newbuilding price at excess of $47mil.
In the kamsarmax segment, Chartworld Shipping of Greece is said to have inked a letter of intent with Cosco Dalian Shipyard of China for two bulkers of 82,500dwt scheduled for delivery in March 2014, with option for two more sister vessels to follow. In the supramax segment, Swiss Marine of Greece is said to have increased the size for a pair of 57,000dwt units ordered in Jinling of China to 64,000dwt for delivery in 2014. The deal has been placed late last year, but it never reported and the vessels is said to cost around $25-$26mil each. In the handymax segment, Shanghai Yinhua Shipping, a subsidiary of China Shipping Development Company, has added a 47,500 dwt vessel at China Shipping Industrial Jiangsu, wholly owned by China Shipping Development Company, at a cost of $28,7mil for delivery by September 2013. Hong listed CSDC said: “In view of reasonable cost of constructing the bulk vessel, the directors are of the view that the construction and ownership of the bulk vessel is low risk, efficient and will increase the competitiveness of the group in the shipping market.”
In the handysize segment, Chinese shipbuilder Guangzhou Wenchong has announced it latest order for four eco 28,000 dwt units from US owner Seaboard Marine designed to burn low-sulphur fuel so they can enter emission controlled waters in Europe and the US. Main particulars of this vessel type are length 175m, a beam of 27m and draft of 8m. The vessels are stemmed for delivery in
2014/2015. In addition, German dry bulk owner, Oldendorff Carriers, has ordered two 35,000 dwt eco bulkers at South Korean run Samjin Shipbuilding Industry for delivery in October and December 2013, with an option of two more for delivery in 2014. Oldendorff Carriers stated that ships will have a 35-ton cranes, strong tanktops, a water ballast treatment system and be fully fitted for logs.
In the container segment, Shanghai Jinjiang has ordered four feeder box ships of 1,100TEU in JIANGNAN Shipyard of China for delivery in 2014. The vessels will be used for Chinese coastal cabotage and Shanghai Jinjiang has also arranged options for further ships as part of the deal. Last week’s reported order by UK’s Zodiac Maritime Agencies for five 5,000TEU large panamax boxships, with an option for five more, for construction at Hanjin Subic Bay is now said to have been ordered at STX’s Dalian yard for delivery by the third quarter of 2014 at a value of $45M each.
In the tanker segment, serious doubts exist for the delivery of 12 very large crude carrier newbuildings from Chinese shipyards ordered by Iranian tanker owner NITC amid ongoing European Union sanctions against the Middle Eastern state. NITC officials said that they are not going to take immediate delivery of the vessels due to poor market conditions causing serious issues in Chinese shipyards. Six 318,000dwt vessels were ordered at Dalian Shipbuilding Industry and further six at Shanghai Waigaoqiao
Shipbuilding in August 2009.
In the gas tanker segment, STX Offshore & Shipbuilding has singed a contract with Russian shipowner Sovcomflot to extend the number of optional LNG carrier newbuilding slots it holds with the South Korean yard with delivery a total of 10 newbuildings to Sovcomflot.. The vessels will be all constructed at STX O&S’ Jinhae based yard with the participation from United Shipbuilding Corp, the Russian conglomerate that will build a yard with STX Group in St Petersburg. Sovcomflot has already signed agreement to lease out the four firm orders, which will be delivered between late 2013 and early 2015, to Shell and Gazprom on two separate long term contracts. In addition, Alpha Tankers & Freighters is said to have placed an order for a 160,000 cu.m LNG carrier, with an option for one more, at STX O&S’s Jinhae facility at about $200mil with delivery by the end of March 2015. In the LPG segment, HYUNDAI HI of South Korea has won a new order for two LPG/Ammonia carriers of 38,000 cu.m capacity from a Turkish shipowner, Negmar Denizcilik for delivery 3Q and 4Q 2013 at an undisclosed contract price.
In the car carrier segment, South Korean player Hyundai Glovis is said to have firmed up a plan to order three 6,700 car equivalent (ceu) vessels for delivery from late 2013 to early 2014 at a price around $71mil each. The yard is understood to be Hyundai Heavy Industries as it has already delivered to the owner two other 6,500 cue units this year and will deliver two more in the middle of next year.
In the offshore segment, the buoyant activity seems to have no end with subsea construction vessels, platform supply, drilling rigs and anchor handing tugs being on the spotlight for new construction. Olympic Shipping agreed construction of one MT 6022 MK II subsea support construction vessel from Kleven Ulsteinvik for delivery in August 2013 at a price of NOK 600 million ($101 million), with option for one more unit. The small yard of Fjellstrand will build six plus optional four windfarm support vessels for Denmark’s World Marine Offshore with deliveries throughout 2013. Italian builder Rosetti received a repeat order from Augustea Ship Management for another Rolls-Royce UT 712 CD anchor handler for delivery in June 2014 at $28.39 million. A letter of intent was signed by Bumi Armada Navigation, Malaysia with local builder Nam Cheong for four plus optional four DP2 platform support vessels at $130 million with deliveries within 2014. In addition, Norway’s Stavanger based Simon Mokster Shipping has ordered in Astilleros Gondan of Spain its latest UT776 WP designed platform supply vessel for delivery in summer 2014. The vessel is purpose built for a three year fixed charter with Statoil with 3 x 1 year options attached. This latest order is the second placed by Mokster within a month after placing a contract with compatriot builder Simek for one 85m Subsea vessel.

DEMOLITION MARKET
In the demolition market, the downward revision of scrap prices seems that will persist as owners are still offering a high supply of vessels for disposal under the dire freight market conditions with the upcoming monsoon season and local fundamentals, currency and steel prices, adding in the current status of prices offered in the Indian subcontinent region. Scrap prices have fallen by 20% from early February, when they were $475-$485/ldt in the Indian subcontinent region for dry/general cargo and $490-$500/ldt for wet cargo. Price levels of India remain the same with China as Indian rupee is still suffering against dollar and there are not signs of a firmer rebound. Bangladesh and Pakistan offer levels of $370-$380/ldt for dry units and $400/ldt for wet, while India with China $350-$360/ldt for dry and $370-$390/ldt for wet.
The record scrapping volumes kept in the bulk carrier segment alleviates the oversupply plain, but it is still not enough to correct the imbalance of the freight markets. According to DVB Group’s research division, scrapping volumes need to at least triple to counterbalance the newbuildings entering the market. DVB emphasizes that today’s scrapping volumes are near those achieved in the previous highs of 1986, but the volume of ships scrapped this year accounts 3% of the existing fleet compared with 7% in 1986.
The week ended with 29 vessels reported to have been headed to the scrap yards of total deadweight 1,426,373 tons, while 8 scrapping removals are old deals that just came to light. In terms of the reported number of transactions, the demolition activity is up by 81% from previous week’s business with dry bulk carrier disposals attracting 34% of scrapping business, while In terms of total deadweight sent for scrap there has been an increase of 75%. China is on the frontline by winning 6 of the 29 total demolition transactions. In terms of scrap price levels, notable demo deal in the bulk carrier, the disposal of M/V “B AMERICA” of 43,575dwt built 1984 ldt 8,105 for $383/ldt Bangladesh, while in the wet market, the disposal of M/T “ISI OLIVE” of 163,055dwt built 1995 ldt 20,608tons for $407/ldt Pakistan.
At a similar week in 2011, demolition activity was 69% lower than today’s levels, in terms of the reported number of transactions, when 9 vessels had been reported for scrap of total deadweight 497,674 tons with bulk carriers and tankers grasping 44% and 22% respectively of the total number of vessels sent for disposal. Scrap prices were floating at stronger levels with Bangladesh and India offering $480-$495/ldt for dry and $510-$520/ldt for wet cargo.

2012-06-25 09:34:14

Newbuilding business surpassed this week the secondhand and demolition momentum as offshore support vessels segment seems the most promising for investing in the construction of new units. There has been a relative quiet week in the purchase of secondhand dry units with the BDI sending signals for a further correction downwards in asset prices, while the crude tanker segment remains unattractive. Scrapping momentum has been relative stable in June with no more than 10 vessels being headed to the scrap yards on an average per week.
Overall, 44 transactions reported worldwide in the secondhand and demolition market, up by 69.23% week on week due to a 55.5% increase of activity in the secondhand market and 100% rise on the scrapping business At similar week in 2011, the total S&P activity was 15% lower, when 33 transactions had been reported and secondhand ship purchasing activity was 27% lower than the ordering business.

SECONDHAND MARKET
Potential buyers seem to wait further cuts in asset prices before buying due to dire conditions in the dry and wet freight markets and the dark near term outlook. In the tanker segment, MR sizes continue to be in the frontline with limited crude carriers’ purchasing activity from sharp falls in vessels’ earnings. In the bulk carrier segment, capesize vessels are not in the top preference list of investors as the spot freight market remains below covering vessels’ operating expenses with owners scrapping their overaged vessers rather than buying new ones. Surpamax and handies are more popular purchase candidates with stronger performance and stability in the freight markets.
Notable sale in the tanker segment the sale of M/T “SHAMROCK VENUS” of 19,908dwt built 2006 Japan for excess $20mil, when in October last year sister vessel was reported to have changed hands for a price in the region of $24 mil. In the bulk carrier segment, the sale of M/V “CAPSTONE” of about 76,000dwt built 2000 Japan for about $13,6 mil underlines the sharp fall of asset prices for dry units, as in July last year a similar sized and aged vessel built in Japan was reported sold for a price in the region of $22,4mil.
Overall, 28 vessels reported to have changed hands this week at a total invested capital in the region of US$ 434,5 mil with all vessel types, bulk carriers, tankers, containers and liners being on the centre of investors’ focus, while the offshore segment held the lion’s share of S&P activity due to the enbloc sale of 10 platform supply vessels for a total sale price of about $250mil. In terms of the reported number of transactions, the S&P activity is up by 55.5% from last week’s activity, and up by 75% comparable with previous year’s weekly S&P activity, when 16 vessels induced buyers’ interest at a total invested capital of about $180,15 million, with bulk carriers holding 50% of the total volume of S&P activity and tankers 44%. In terms of invested capital, the offshore segment appears the most overweight by attracting about 63% from the relevant enbloc sale to US buyers, while containers to follow by holding 17% share.

NEWBUILDING MARKET
Overall, the week closed with a remarkable record activity from a continued increased volume of newbuilding contracts for specialized units. There has been also a noticeable fresh business for bulk carriers, tankers and containers. There has been a 160% and 67% rise in bulk carriers’ and tankers’ newbuilding activity from last week, while in the tanker segment 6 new units have been ordered. In the offshore segment, there has been a 67% rise with 30 new contracts reported worldwide from 18 last week, with Norwegian owners placing strong volume of order for platform supply vessels.
The week ended with 55 fresh orders reported worldwide at a total deadweight of 1,789,700 tons, posting a 57% week-on-week increase. Amid the economic turmoil, the slump of the freight market and the distressed ship financing, the low newbuilding prices attract owners for their expansion of their fleet through the construction of new units with large sized vessel units in the main conventional vessel segments, bulk carriers and tankers, being out of their spotlight. This week’s total newbuilding business is up by 150% from similar week’s closing in 2011, when 22 fresh orders had been reported with bulk carriers grasping again the lion share, 32% of the total newbuilding business, and special projects were holding 23% of the business compared with 55% share today’s levels. In terms of invested capital, the total amount of money invested is estimated at region $1,74 billion with 35% of the total number of orders being reported at an undisclosed contract price. The offshore segment appears again the most overweight by holding 54% of this week’s total amount of money invested and containers follow with a 50% share. Notable order of this week has been the placement for a ten units’ order of 5,000 TEU boxships by Zodiac Maritime Agencies at a total contract value in the region of $450 mil.
In the bulk carrier segment, Nanjing Hengrui Shipping has ordered a 51,000dwt bulker at domestic yard Nanjing Wujiazui Shipbuilding for delivery in 2014, with option for one more unit, to be used for domestic trading. In addition, Chinese owner Jiangsu Steamship has placed an order for four ultramax bulkers of 64,000dwt in a Singapore listed Yangzijiang Shipbuilding for delivery in May, July, September and December 2014. The contract price is not revealed, but sources suggest that the owner is paying around $26-$27mil each vessel. The order is said to be Yangzijiang’s first contract for ultramax bulkers.
In the tanker segment, two aframax tankers of 110,000dwt reported to have been ordered by Dalian Shipbuilding Industry of China by Seatankers Management of Cyprus at a price of region $44mil with delivery in 2014. CHEVRON Shipping of the US has added one suezmax shuttle tanker unit of 160,000 dwt at Samsung Heavy Industries from its previous order placed in summer last year for delivery in June 2014 at a cost in the region of $100 mil. In the MR size, Greek owner Pleiades Shipping has added two more units of 51,000dwt in STX Shipbuilding of South Korea for delivery in 2013-2014 from its initial order for four similar sized units last year.
In the gas tanker segment, Georgas Maritime SAS has ordered one more LPG carrier of 35,000 cu.m in Hyundai Mipo of South Korea for delivery in the beginning of 2014 at a contract price of $50mil, two units are now ordered. Furthermore, LPG player Unigas is said to be sealing an order for up to six 12,000 cbm ethylene carriers in STX Offshore & Shipbuilding of South Korea at a price believed to be below $32mil. The three partners in Unigas, Othello Shipping, Schulte and Sloman Neptune are expected to initially sign up for one vessel each with an option for a second.
In the container segment, Taiwanese carrier Yang Ming Marine Transport plans to order five ultra large boxships by the end of this year. A Yang Ming spokesman stated in Lloyds List that they are planning to make purchases of five 14,000 TEU-16,000 TEU boxships by the end of this year and are now assessing details, but the time is not exactly set in stone. The order will be placed when they are sure that the market favors. Yang Ming has yet to decide how will finance the order and it plans to raise $T8bn ($267.9m) from sales of convertible bonds to build working capital that could limit its requirement to borrow. On the other hand, Evergreen’s order for 10 13,800 TEU boxship units is in doubt as owner is said to have been unable to raise financing. The order has been placed by Korea Infrastructure Investments Asset Management Co. to be chartered to Evergreen for 10 years at around
$50,000/day with a purchase option on the vessels at the end of the charter. In the large panamax segment, London based Zodiac Maritime Agencies is said to have finalized a 10 boxships order of 5,000 TEU at STX Offshore & Shipbuilding Chinese facility in Dalian at the price of $40mil each for delivery in early 2014. However, market sources suggest that the contract price may be even lower in the region of $40mil each and Zodiac has penned a letter of intent for five plus five 5,000 TEU boxships. In the handy segment, Avin International of Greece has placed an order for two 1,700 units in Zhejiang Ouhua of China for delivery in 2013-
2014 at a price of $25mil each, the contract includes the option for two more units.

DEMOLITION MARKET
In the demolition market, Japanese giant Mitsui OSK Lines has scrapped its 180,972dwt capesize unit built 1988 in a Chinese green recycling facility with 400tons of bunkers on board at $370/ldt, while at the end of April similar sized vessels were fetching levels of more than $450/ldt. The downward scrap price momentum seems that has not impaired owners’ decision for scrapping their overaged capesize units as the current freight market does not support their operating expenses and the near term outlook remains negative. Scrap price levels are still below $400/ldt for dry/general cargo units with India offering almost the similar levels of China’s. Bangladesh has stepped in more dynamic during the second quarter of the year with India facing the biggest currency’s problem over the last months.
The week ended with 16 vessels reported to have been headed to the scrap yards of total deadweight 816,188 tons. In terms of the reported number of transactions, the demolition activity has doubled from previous week’s business with dry bulk carrier disposals attracting 50% of scrapping business, while In terms of total deadweight sent for scrap there has been an increase of 162.5%. India is on the frontline by winning 6 of the 16 total demolition transactions, with Bangladesh and China to follow.
At a similar week in 2011, demolition activity was at similar levels in terms of the reported number of transactions, 17 vessels had been reported for scrap of total deadweight 709,194 tons with bulk carriers and tankers grasping 30% and 17% respectively of the total number of vessels sent for disposal. Scrap prices were floating at stronger levels with Bangladesh and India offering $480-$495/ldt for dry and $510-$520/ldt for wet cargo.

2012-06-18 11:00:03

After Posidonia exhibitions and the subdued purchasing activity of last week’s, there was some intense activity in last days with alluring asset prices continue to drag investors’ interest despite the weak freight market and the tight ship financing status that troubles potential shipping investors. Demolition business keeps its record business in the bulk carriers’ scrapping activity, while the newbuilding momentum resembles memories of 2009, when bulk carrier and tanker newbuilding transactions reached record lows from the 2008 over ordering levels.
Overall, 26 transactions reported worldwide in the secondhand and demolition market, up by 30% week on week due to a 50% increase of activity in the secondhand market and 157% strong offshore newbuilding business. At similar week in 2011, the total S&P activity was 50% higher, when 39 transactions had been reported and secondhand ship purchasing activity was 11% higher than the ordering business.

SECONDHAND MARKET
Overall, 18 vessels reported to have changed hands this week at a total invested capital in the region of US$ 223,35 mil with bulk carriers and tankers being on the centre of investors’ focus. Bulk carriers held the33% share of the total S&P activity and tankers 22%. In terms of the reported number of transactions, the S&P activity is up by 50% from last week’s activity, with a 100% increase in dry bulk and tanker purchases, and down by 14% comparable with previous year’s weekly S&P activity, when 21 vessels induced buyers’ interest at a total invested capital of about $444,3 million, with bulk carriers holding 43% of the total volume of S&P activity. In terms of invested capital, the bulk and tanker segment attracted about 88% of the total invested capital with containers and liners to follow by holding 22% share.

NEWBUILDING MARKET
One more week with intense offshore newbuilding business and light fresh activity for the main conventional vessel segments, bulk carriers and containers, while in the tanker segment no deal was reported. Platform supply vessels, subsea construction vessels and drilling rigs are some of the specialized vessel types that offer new business in the struggling European yards, while Chinese shipbuilders are seeking ways to compete with its rivals and expand in offshore business with South Korean yards having the winning share in the newbuilding market from strong LNG contracting activity.
Overall, the week closed with 35 fresh orders reported worldwide at a total deadweight of 694,900 tons, posting a 150% week-on- week increase due to a 150% increase in the offshore newbuilding activity. This week’s total newbuilding business is down by 84% from similar week’s closing in 2011, when 19 fresh orders had been reported with special project vessels grasping again the lion share, 47% of the total newbuilding business, which implies that 2011 newbuilding trends are being repeated this year. Investors are still moving towards the construction of more specialized units due to the oversupply challenges in the dry and wet markets. In terms of invested capital, the total amount of money invested is estimated at region $1,19 billion with 48% of the total number of orders being reported at an undisclosed contract price. The offshore segment appears the most overweight by holding 68% of this week’s total amount of money invested with a high valued notable jack up drilling contract by Maersk Drilling in Keppel Fels yard of Singapore with delivery in January of 2015.
In the bulk carrier segment, China’s Yangfan Shipbuilding won an order for two handysize units of 36,100dwt for a Canadian shipowner, Canada Steamship Lines, at a total value of $55 mil for delivery in December 2013. In addition, Jiangsu Hantong Ship HI of China confirmed that it will build a LNG dual fuel supramax bulker of 50,000dwt, which is the first such ship to be built in China, for an undisclosed contractor. The vessel will be delivered in the first quarter of 2014 and will transport finished products between Europe and China on long term contracts.
In the gas tanker segment, Japanese giants NYK and Mitsui OSK Lines is said to be in the process of ordering 160,000cbm LNG carriers on behalf of two utility companies. MOL is expected to contract two ships for Kansai Electric Co., one of which will be built at Kawasaki Heavy Industries and the other at Mitsubishi Heavy Industries. The company is expected to order also one ship at Mitsubishi Heavy Industries for chartering to Chubu Electric Co. NYK is also believed to be in a working partnership with Mitsubishi Heavy Industries for the construction of one ship for Chubu. The contracts are believed to be fully finalized, but they are waiting on board approvals which are not expected until September-October.
In the container segment, German owner Bernhard Schulte and private equity group JP Morgan have jointly ordered a series of five mid-sized containerships of 5,100 TEU, with an option of five more, in Hanjin’s Subic Bay yard, the Philippines unit of South Korean Hanjin Heavy Industries & Construction with delivery from 2014. The boxship units are said to be cost around $45 mil each and are eco friendly designed with a length of 225m, breadth of 37m and 22m in height with a sailing speed of 21.5 knots.
In the RO-PAX segment, Caledonian Maritime Assets of UK have ordered a ro-pax ferry in Germany’s Flensburger Schiffbau with delivery in June 2014 at price of $63,7mil. The vessel will have a capacity for up to 700 passengers and 143 cars or 20 commercial vehicles. Furthermore, Western Ferries of UK have ordered two shortsea passenger vehicle ferries in Cammell Laird of UK as replacements for two ageing ships with delivery in summer 2013.
In the offshore segment, Rieber Shipping of Norway ordered one ULSTEIN SX 121 subsea construction vessel, with an option for one more, from domestic shipyard Ulstein at a value of NOK 800 million with delivery for the first quarter of 2015. The contractor commented that Norway is a world leader when it comes to design and quality of specialized offshore vessels, which is a determining factor in Ulstein’s success. Furthermore, Maersk Drilling confirmed a third jack up drilling rig from Keppel Fels, Singapore, which is a repeat of a similar order in February 2011, but now costing $50 million more at $650 million, with an option for one more unit.
Norwegian Investment Company Blue Ship Invest, a subsidiary of Ulstein group, has placed an order for four platform supply vessels at Ulstein Verft yard of the ULSTEIN PX 121 design, which are well suited for North Sea and North Atlantic conditions, with deliveary in 2013. STX OSV of Norway has signed a letter of intent with Troms Offshore for the design and construction of a new platform supply vessel of 5,700dwt that will be one of the largest PSV’s in the market and will be chartered in a long term contract to Statoil. The vessel is scheduled to be delivered at fourth quarter of 2013 and will be an innovative ship design environmentally friendly with focus on low fuel consumption and low emission of greenhouse gases. STX OSV of Norway has also sealed one of the biggest contracts since its listing in Singapore in November 2010 for an offshore subsea construction vessel from a joint venture between Ocean Installer and Solstad Offshore, one of Norway’s biggest shipping companies. The vessel is scheduled for delivery in the second quarter of 2014 and the contract is subject to board approval by the Norwegian Guarantee Institute for Export Credits, which is expected to be received around June 20th.
Furthermore, Germany’s Flensburger Schiffbau yard has won its first contract in the offshore sector as an important milestone for the necessary diversification of the yard, for two seismic survey vessels by a geophysical services company WesternGeco for delivery in 2014.

DEMOLITION MARKET
In the demolition market, a downward movement in scrap price levels persists with rates falling below $400/ldt for dry/general cargo and the upcoming monsoon season pushing further the price momentum. In June last year, price levels in the Indian subcontinent region were standing near to $500/ldt for dry/general cargo and excess $500/ldt for wet cargo, while the price momentum was positive towards to stronger levels than today’s.
The week ended with 8 vessels reported to have been headed to the scrap yards of total deadweight 310,911 tons. In terms of the reported number of transactions, the demolition activity is at the same levels of previous week’s business with dry bulk carrier disposals attracting 75% of scrapping business, while In terms of total deadweight sent for scrap there has been a fall of 48% due to zero activity reported for large sized vessels, capesizes. Bangladesh is on the frontline by winning 4 of the 8 total demolition transactions, while notable demolition deal came to light this week for an aframax tanker of 95,649dwt built 1994 Japan with a lightweight of 15,912 tons heading in Bangladesh for $490/deal, which is an old deal as these scrap price levels are no longer feasible.
At a similar week in 2011, demolition activity was up by 125%, in terms of the reported number of transactions, 18 vessels had been reported for scrap of total deadweight 849,780 tons with bulk carriers grasping 50% of the total number of vessels sent for disposal. Scrap prices were floating at stronger levels with Bangladesh and India offering $485-$495/ldt for dry and $515-$520/ldt for wet cargo.

2012-06-11 09:27:46

The first week of June ends with low business in the secondhand, intense newbuilding business for offshore vessels and steady scrapping activity with bulk carriers holding the lion share of the scrapping activity. Poseidonia Exhibition attracted the interest of shipping community, while the BDI fell to new lows by closing on Friday at 877 points, down by 24% from the beginning of May, and 230 points above from the 26 year historical low of 647 points on February 3rd.
Shipyards  are  struggling  to  survive  with  South  Korean  shipbuilders  being  in  the  frontline  by  winning  the  biggest  share  of newbuilding activity this year among Japanese and Chinese yards. IHS Fairplay data showed that South Korean shipbuilders won 4,73 million dwt of new orders in the first quarter of 2012, while Chinese builders had 4,35 million dwt and Japanese 2,8 million dwt. In the Europe, Germany’s P+S Werften, one of the big few yards left in the country, is under pressure to agree on EUR 110million ($137,5 million) in cost cuts and debt relief to assure another EUR 182 million from the federal and state budgets in an emergency aid. Furthermore, STX France has extended short time working during summer, as the unit of South Korea’s STX is facing falling volume of business. Union leaders at the French yard said that they have been told that existing short time working will be prolonged this summer with 12,700 days of lay-off planned for July and August.
Overall, 20 transactions reported worldwide in the secondhand and demolition market, down by 20% week on week due to limited sale and purchase transactions in the secondhand market with the newbuilding business keeping the highest activity by recording 14 newbuilding contracts. At similar week in 2011, the total S&P activity was 20% higher, when 24 transactions had been reported and secondhand ship purchasing activity was 30% lower than the ordering business.

SECONDHAND MARKET
Notable sale of this week was in the bulk carrier segment of a capesize vessel of 179,700dwt built 2012, M/V “SAG BULK CHINA”, formerly “ORIENT GWANGYANG 1015” to a South Korean buyer at a price in the region of $44 mil. The vessel is said to have been ordered by German KG financier Salamon AG for $90 mil in June 2006, with a scheduled delivery in October 2009, and it was one of the four capesizes ordered by the German investment group.
The Greenfield South Korean Shipbuilder, Orient Shipyard, was unable to deliver the tonnage and Salamon cancelled the contract with M/V “SAG BULK CHINA” being the only capesize of the contract that was completed, while the other three were scrapped before completion.
In the tanker segment, a suezmax tanker of about 160,000dwt built 1998 South Korea reported to have been sold to Middle East based buyers for employment as floating storage for a price in the region of excess $20 mil. At the beginning of May, two vessels of about 150,000dwt built 1998 Japan were reported sold enbloc for $15,25mil each. In the MR size, a vessel of 51,600dwt built 2013 at Hyundai Mipo reported sold for $33,5mil to Danish buyers.
Overall, 12 vessels reported to have changed hands this week at a total invested capital in the region of US$ 147,51 mil with limited business in the bulk carrier, tanker, liner and container segment. Bulk carriers and tankers held the 42% share of the total S&P activity. In terms of the reported number of transactions, the S&P activity is down by 30% from last week’s activity, with a 72% decline in tanker purchases, and down by 14% comparable with previous year’s weekly S&P activity, when 14 vessels induced buyers’ interest at a total invested capital of about $160,6 million, with bulk carriers and tankers holding 93% of the total volume of S&P activity. In terms of invested capital, the bulk and tanker segment attracted about 88% of the total invested capital with gas tankers to follow by holding 4% share.

NEWBUILDING MARKET
From the end of May, newbuilding business keeps its low track with no more than 10 fresh contracts being reported in the last two weeks as the imbalance in the freight markets persists and the oversupply issue hunters the prosperity of investors. In the dry bulk carrier sector, the activity remains subdued as the BDI hovers again below the psychological barrier of 1,000 points mark, while some new deals came to light in the tanker and gas tanker segment. Offshore newbuilding projects are still in the preference of investors with Daewoo Shipbuilding and Marine Engineering of South Korea receiving its first order for LNG FPSO at a value of 909.8Bn won ($777 million). The project will be built for Malaysia’s Petronas for delivery in June 2015 and is about 300m in length,
60m in width and can store up to 180,000 cubic meters of LNG 20,000 cubic meters of liquefied carbonized hydrogen condesates.
Overall, the week closed with 14 fresh orders reported worldwide at a total deadweight of 292,000 tons, posting a 100% week-on- week increase due to a 75% increase in the offshore newbuilding activity. This week’s total newbuilding business is down by 30% from similar week’s closing in 2011, when 20 fresh orders had been reported and containers were grasping the lion share by recording 6 newbuilding contracts. In terms of invested capital, the total amount of money invested is estimated at region $1,255 billion with 57% of the total number of orders being reported at an undisclosed contract price. The offshore segment appears the most overweight by holding 80% of this week’s total amount of money invested due to the high valued LNG FPSO contract won by DSME of South Korea.
In the bulk carrier segment, Taiwan’s CSBC Corp has won an order for two 35,000dwt units from domestic owner China Steel Express Corp, the marine transport arm of China Steel Corp at a price of $25 mil each with delivery in the fourth quarter of 2013.
In  the  tanker  segment,  Norwegian  Frontline  following  its  previous  order  placed  in  the  aframax segment  for  four  units  of 115,000dwt in Chinese yard, Guangzhou Longxue, it has now confirmed a LPG contract for up to six 82,000 cu.m units from Jiangnan Shipyard Group at a price below $70 mil each. Frontline’s newbuilding investments are being justified by its completion of a $210 million private placement with an agreement to acquire a total of 16 firm newbuilding contracts and eight fixed price optional contracts in the crude and product markets. In the MR tanker sector, private equity Alterna Capital of USA has doubled its existing orderbook by exercising its option from an earlier order placed in April for two more 50,000dwt units at STX Jinhae for delivery in 2014.
In the container segment, newbuilding activity has been dwindled significantly from last year’s levels with Japanese shipbuilders facing strong competition from Chinese and South Korean yards. An interesting box ship alliance was disclosed this week among Japanese shipbuilders Mitsubish HI and Imabari Shipbuilding to collaborate on box ship technology. The groups said: “Mitsubish HI and Imabari Shipbuilding will become capable of flexibly accommodating bulk orders, construction of multiple ships of the same design, thus strengthening and expanding their respective business for high value added container carriers.” Both yards believe that their strategy is viable because lines are increasingly moving towards ultra large container ships that offer lower slot costs. The three year collaboration agreement encompasses all box carriers of all sizes and propulsion systems. The yards will consider the appropriate ship type, propulsion system and other technological features.
In the liner segment, state-owned China’s Huanghai Shipbuilding is setting a shipowing arm and sources suggest that is going to order a 30,000dwt multipurpose vessel at a price in the region of $30 mil for its new outfit. Furthermore, China’s Jinhai Heavy Industries is said to have won an order for four 28,000 dwt multipurpose units from a domestic owner for delivery in 2014 at an undisclosed contract price, while the order is at the stage of letter of intent.

DEMOLITION MARKET
The dreadful status of capesize operators with average time charter earnings floating once more within the year below $5,000/day welcomes the opportunity for further vessel removals in the already oversupplied dry bulk market. Bangladesh and Pakistan are offering the best price levels, in the region of excess $400/ldt with India loosing its leading power from historical lows reached last week.
The week ended with 8 vessels reported to have been headed to the scrap yards of total deadweight 598,291 tons. In terms of the reported number of transactions, the demolition activity is at the same levels of previous week’s business with capesize dry bulk carrier disposals being in the frontline, while In terms of total deadweight sent for scrap there has been a fall of 16%. In terms of scrap price levels, notable demolition sale was in the bulk carrier segment of a capesize unit with about 172,428 dwt built 1985 with a lightweight of 22,761 M/V “NIGHTWISPER” heading in Bangladesh for $430/ldt. Bangladesh and India are leading the market by winning 6 of the 8 total demolition transactions.

2012-05-28 10:53:00

Week 21st ended with 54 in total deals in the secondhand and demolition market, while just 10 orders in the newbuilding sector. Highest activity has been market in the secondhand market, which reflects the investment opportunities that are in this market and many investors prefer to focus on the secondhand activity rather in the newbuilding one due to the overcapacity and the difficulty of accessibility to finance.

SECONDHAND MARKET
The secondhand market activity has been marked with an 175% increase since last week, with 33 vessels in total reported to have changed hands and a total invested capital to being the region of US$ 502 mil, while 4 deals reported at an undisclosed sale price. The majority of vessels were bulkcarriers and containers reflecting the decrease in asset values, representing around 36% each of the total number of vessels being sold. Comparing to last year’s similar period, the market is at 65% higher levels in terms of numbers of units and 68% higher in terms of invested capital 68%.

NEWBUILDING MARKET
Just ten orders were reported this week, presenting a 52% decrease from last week. The orders were in the bulkcarriers sector and on the car-carrier sector. The total invested capital is calculated to be in the region of usd $ 267.8 mil, while the 2 panamax orders from Shenhua Zhonghai have been reported on private terms.
The bulkcarriers sector is the sector on which most Chinese yards depended their existence and performance, and that is one of the reasons why the Chinese shipbuilding industry is also facing issues on their orderbook, or even better on the lack of business they have. All 8 units were ordered at Chinese yards, 2 of them from Chinese investors and 6 from Italians.  2012 has proved to be a very difficult year for the newbuilding industries of all the countries. According to Fairplay, orders for Japan have presented a 3year low since the beginning of the year.
The car-carrier sector has shown activity since the beginning of the year, with 5 orders to have been placed so far. This week Eukor Car Carriers of South Korea has placed an order for 2 units of 6500car capacity at Hyundai Heavy Industry at a reported cost of $ 67 mil for each vessel, with holding option for two more.
Lastly, although no fresh orders have been revealed in the tanker sector, Sovcomflot seems to have cancelled 2 contracts of aframax vessels at domestic shipyards. According to market sources, the vessels were part of a series of up to 12 vessels ordered back in 2010 in a joint venture between Daewoo of Korea and United Shipbuilding Corp of Russia.

DEMOLITION MARKET
Scrapping activity continues to be strong while demolition prices have a decreasing trend. In total the week ended with 21 vessels reported for demolition, 5% higher than last week, while in terms of deadweight the figure this week is 30% less. The activity is at almost similar levels with the relevant period of last year, when 17 vessels were reported for demo of a total of 1,221,749tons deadweight. Most activity was in Bangladesh and India, although for the majority of the reported demolition deals no information were disclosed, therefore 49% refers to deadweight that went to undisclosed destinations.
It is worth noting that in the container sector; so far the capacity scrapped has reached 124,000teu, while Alphaliner reports that the total containership capacity to be scrapped for the whole year is forecasted to exceed 200,000teau.

2012-05-21 09:17:01

This week ended with much lower activity in all investment types. The second hand and demolition activity is at 29% lower levels than last week, while the newbuilding activity at $ 22% lower levels. Overall, 32 transactions reported worldwide in the secondhand and demolition market, with the activity in newbuilding the demolition sector being at similar levels.

SECONDHAND MARKET
In the secondhand market the activity was 55% less active with 12 vessels in total reported to have changed hands at a total invested capital in the region of US$ 159 mil (at least 16% lower than last week), and 1 transaction being reported at an undisclosed sale price. Bulkcarriers and Tankers attracted mainly the investors’ interest, while the container sector again followed. Comparing to last year’s similar period, the market is at 40% lower levels in terms of numbers of units and in terms of invested capital 83.8% less, which illustrates also the fall in asset prices.

NEWBUILDING MARKET
Newbuilding investments continue to attract investors’ interest although the industry as such is facing its own problems. Many shipbuilding yards are trying to cope with the difficult market and stay alive. China State Shipbuilding Corporation estimates as much as 50% capacity could disappear within 2-3 years, but a 30% is a more conservative figure. South Korea and Japan are also facing similar issues, with finance options as well as bareboat charter options are offered to the prospective investors in order to induce them.
This week, the market has shown again a 22% decrease compared to last week, with 21 new orders reported and this week tankers grasping the lion’s share with 12 out of the 21 orders. Orders in the special projects follow representing 23.8% of the total weekly orderbook. The total invested capital is calculated to be in the region of US $ 1.67 billion, with 5 orders contracted on private terms.
In the bulkcarrier sector, just 2 Ultramaxes have been ordered by Greek owner Laskaridis at Jinhai of China, while London based Ravi Mehrota is in discussions to order six bulkers in China. The discussions are on with four Chinese yards and refer to a pair of panamaxes and four supramaxes. In the tanker sector the MR sector continues to be in the top preference of investors and a Japanese group proceeded to the order of 2 VLCC at compatriot yard IHI Marine at a reported price of $ 100 mil each. The LNG sector, continues  to  attract  interest  of big  investors  with Stena  Bulk  to have  booked two  units of 174,000cbm at Daewoo Shipbuilding, with the subjects of the order being lifted at mid-June,while the company is in discussions to finalise long term employment for the units.
In the container sector, it has been rumored that Zodiac is looking to invest in up to ten 5,000teu vessels and is in talks with Korean yards in order to find the most competitive price and rates. It is said that the company is looking to pay only around $ 45 mil per vessel, with the normal breakeven cost would be around $ 50 mil per vessel. At these levels some South Korean yards have refused while others such as Hyundai Mipo, STX & Hanjin seem to be interested. In case such a deal moves forward Chinese yards would have more pressure to compete in order to be attractive. Additionally Bernard Schulte of Germany is also rumored to be in discussions for 8 x 2,400teu vessels in two Chinese yards (Jiangsu Yangzijiang & Jiangnan) for delivery in 2014, although nothing has been confirmed yet.

DEMOLITION MARKET
The reason of Pakistan and Bangladesh increasing their imports in stock is because of the upcoming announcement of their budgets. Overall, the week ended with 20 vessels reported for demolition, 11% higher than last week, while in terms of deadweight the figure this week is 48% higher. This occurs due to the capesize vessels that were sent to the scrapyards. The majority of vessels that were sent to the scrap yards were bulkcarriers, representing the 65% of the number of vessels that were reported this week for demolition.

2012-05-14 09:42:46

This week the activity was at lower levels for all kind of investments. The second hand and demolition activity is at 21% lower levels than last week, while the newbuilding activity at $ 33% lower. Overall, 45 transactions reported worldwide in the secondhand and demolition market, with the activity in newbuilding and secondhand in same levels. The existing distressed market, enables investors that didn’t grasp the good market and had staid “idle” to take the opportunity now, where the price levels can be considered very attractive and the terms could benefit the buyers side.

SECONDHAND MARKET
In the secondhand market in total 27 vessels reported to have changed hands this week at a total invested capital in the region of US$ 190 mil, with 5 transactions being reported at an undisclosed sale price. Bulkcarriers and Tankers attracted mainly the intestors’ interest, while the container sector followed with sales of competitive prices. Comparing to last year’s similar period, the market is at 41% lower levels now in terms of numbers of units and in terms of invested capital 70% less.

NEWBUILDING MARKET
The newbuilding market continues to move in low levels, due to the imbalance of the market. Although secondhand transactions are more popular for investing, the investors that didn’t make any moves in the newbuidling market during the peak times, have now the capacity to order the units that they believe in and at price levels very competitive as well as with terms that are for their benefit. According to statistics published from Commodore Research, just in the bulkcarrier side, 1,230 vessels are expected to be delivered this year, comparing to 906 delivered in 2010 and around 1,149 in 2011. Over the last years, it has proved to be very difficult to estimate the exact number of deliveries due to the lack of information provided by yards of actual deliveries, orders and cancellations.
This week, the market has shown a 33% decrease compared to last week, with 27 news orders reported and bulkcarriers grasping the lion’s share with 19 out of the 27 orders. Tanker orders followed, representing 22%, and the special projects sector with just two orders but one of a drilling rig and one of a drillship. The total invested capital is calculated to be in the region of US $ 1.2 billion, however it should be taken into account that for 8 contracts, the contract prices haven’t been disclosed.
In the bulkcarrier sector that attracted 70% of the newbuilding investment activity, we saw orders from all sizes, the biggest being of an Ore carrier, which has been reported at $ 116 mil however this figure seems to be too high. Chinese investors, that ordered for the first time panamax size vessels, proceeded with the order of 6 units at Jiangnan, after the yard competed with Chengxi & Bohai in order to win the account. A Chinese yard  that wanted to boost its operations ordered 6 ultramaxes,  which will have a bareboat charter for 10 years to Greeks, with an option to acquire them at the 6th year. Lastly, 6 units were ordered on the handysize sector, while there are discussions that Greek owners Soloi Inc are investigating the market for ordering 2 kamsarmax vessel.

DEMOLITION MARKET
The dynamic presence of Bangladeshi yards is explained due to their effort to stock for the upcoming monsoon season as well as for their budget on the 10th  of June, with the monsoon season most probably decreasing the scrapping activity during June to September.  Furthermore, last week one more scrap yard worker died, marking the 3rd death of a scrap yard worker, after being crushed by a falling iron plate. Although scrapping activity in Bangladesh is still permitted, the situation is sensitive and the Authorities for sure are monitoring the conditions and injuries.
Until end April, in total 34 vessels have been sent to Bangladesh, comparing to 17 in 2011, while India maintained her strong presence by attracting most business with 166 vessels comparing to 130 for the same period last year. Pakistan follows with 28 vessels reported heading her scrapyards and China keeps the second place with 43 recorded transactions. Overall, 365 vessels have been reported sent to the scrapyards for 2012, a figure 52.7% increased from 2011 same period levels.
This week, the demolition activity was 28% lower in terms of number of vessels heading the scrapyards, but only 13% lower in terms of deadweight sent for scrap. This is explained from the fact that 3 capesize vessels were sold for demolition, two of which went to Bangladesh while the destination for the third remains undisclosed. In total 18 vessels went for scrap of a total deadweight of 894,843 tons. Again the vessels headed the scrapyards were from almost all types and most active markets were Bangladesh, India & Pakistan although for 6 out of the 18 the destination remains unknown. In the similar week of last year the number of vessels sold for demolition were again 18 but in terms of deadweight it was 53% higher.

2012-05-07 11:27:43

The second hand and demolition activity continues as similar levels with last week, while the activity in the newbuilding market increased by 40%. Overall, 55 transactions reported worldwide in the secondhand and demolition market and it is an interesting coincidence that the figures are almost at exact same levels.

SECONDHAND MARKET
In the secondhand market in total 30 vessels reported to have changed hands this week at a total invested capital in the region of US$ 230 mil, with 7 transactions being reported at an undisclosed sale price. Tankers grasped lion’s share attracting 40% of the activity and 44% of the total invested capital, with bulk carriers to follow.

NEWBUILDING MARKET
The newbuilding market has shown a 67% increase compared to last week, with the tanker sector driving the activity and presenting a w-o-w increase of 225%. The action focused on the MR segment with Sea Tankers of Cyprus and Tanker Pacific Management of Singapore ordering 4 units with options two plus two each. Overall, the week closed with 40 orders reported worldwide at a total deadweight of 841,740 tons. The total invested capital from the contracts with reveal data is about $ 1.14bil, while again around 75% of the newbuilding business has been reported on private terms. In the bulkcarrier sector 3 orders were reported, with one (option one more) being from Greek interests of a “flexible bulker design” of 66,000dwt. Densay Shipping of Turkey is rumored to have ordered two 82,000dwt vessels from Jinling Shipyard in China, however the owners of the company deny it, while confirm that the deal is at the LOI signing stage.
In the container market, fresh orders haven’t been reported; although there are discussions that Seaspan is expected to sign a LOI for 18 ships of 10,000teu. These orders will be options that were attached to Seaspan’s order of June 2011 for 7 such vessels of a value of $ 700mil. Additionally, Avin International from Greece is said to be entering the container sector with two 1700teu vessels from China’S Zhejiang Ouhua Shipbuilding at a reported price of $ 50 mil enbloc, while the order is thought to include also options for two additional units. What also drew industry’s attention was that CSCL (China Shipping Container Line) announced that it will not be taking options for 4 10,000teu vessels, the initial order of which was made in October last year at $ 94 mil each that were ordered at Dalian Shipbuilding and Hudong Zhonghua.

DEMOLITION MARKET
In the demolition market, the scrapping business continues to be on the high side, with the week ending with 25 vessels of a total deadweight of 1,032,443tons. The vessels sent to the scrapyards have been almost from all vessel types, with almost all markets being active. India attracted most business, while Pakistan and Bangladesh followed. In terms of scrap rates, for the wet sector th rates are in xs of $ 500, while for the dry side in the region of high $ 400/ldt, even $ 500/ldt depending on the vessel, the destination and the terms of business.

2012-04-28 13:43:41

Further to the Easter Holidays, the week ended with quite an activity in all three sectors, with figures at similar levels. Investors seem to have an appetite for the secondhand market, taking into advantage the distressed market, while the existence of financing provides power to those who withhold it and offers them the opportunity to invest in this cyclical market.  Simultaneously, those that can’t handle the market are being triggered by the alternative of sending their vessels for demolition.
Although all segments showed similar movements, the highest activity has been reported in the secondhand market with 30 deals reported in total, with bulkcarriers attracting most interest. Overall, 55 transactions reported worldwide in the secondhand and demolition market, down by 22.5% from our previous report, however this isn’t indicative since the previous report published referred to 2 weeks due to the Greek Orthodox Easter holidays.

SECONDHAND MARKET
In the second-hand market in total 30 vessels reported to have changed hands this week at a total invested capital in the region of US$ 229.7 mil, with 4 transactions being reported at an undisclosed sale price. Bulk carriers, tankers and containers grasped 40%, 20% & 16.6% share respectively of the S&P activity, while the majority of vessels reported are of smaller size. In the bulkcarriers sector, most vessels were Panamax and smaller size vessels, with just one capsize of 1996 built where the sale included also a bareboat charter attached. And in the tanker from 5 from the 6 vessels that have been reported are of below 10,000 dwt.

NEWBUILDING MARKET
The new building market has shown a 35% decrease compared to last week, while the negative prospects of the sector don’t seem to change. Shipyards are facing pressure as they try to stay into business, to attract new business and also to handle the orders that have already accepted, since they deal with not only cancellations but also renegotiations for delay the delivery of the vessels for the contracts already accepted. One of the many examples is of Zim Integrated Services (the Israeli line) that is again trying to push back the delivery of the vessels that were booked within 2007 and were expected to be delivered this year. The company is in discussions that the 12,500teu vessels under construction at Samsung H.I. to be transferred for delivery in 2018.
Overall, the week closed with 24 orders reported worldwide at a total deadweight of 1,649,180 tons, posting a 35% week-on-week decrease. Additionally some orders were reported in the market from Japanese shipyards, however we assume they refer to older business that has been now revealed. The order of the Korean Infrastructure Investment Asset Management Company of 10
13,800TEU container vessels, which was also mentioned during the previous weeks in the market, boosts the activity of this week since it represents 41.5% of the total activity. The total invested capital cannot be calculated since almost 46% of the new building business has been reported on private terms. In the bulkcarriers side all three orders came from Far East investors, while in the tanker segment the two orders came from Japan and the other two from the US. The reported business refers to MR sector which continues to draw investors’ preference. Lastly, the offshore segment continues to attract a steady interest from investors, posting a 20% increase on a weekly basis.

DEMOLITION MARKET
In the demolition market, the scrapping business keeps its high record pace and this week ended with 25 vessels (3 of which have been reported as older business) of a total deadweight of 1,384,181 tons. It is interesting to note that all of the vessels that have been recorded this week to head to the demolition yards are of dry tonnage.  Bulkcarriers grasped the lions share with 48% and containers and general cargo vessels followed with 20%.
The activity was evident from this week’s reported demolition sales in all markets except Pakistan. India attracted the majority with 36% and total deadweight of 493,171tons, although Bangladesh attracted just 3 units of total deadweight 510,726 (since 2 of them were capsizes). The highest prices have been offered for the capesize vessels reported from Bangladesh & India at $ 480-490/ldt, with MV KATSURAGI MARU 188,000/1986 acquiring the highest recorded price of $ 490/ldt from Bangladesh.

2012-04-23 09:24:51

Investors haven’t lost their momentum before and after Eastern Holidays with bulk carriers being a preferable choice for purchase in the secondhand market and also very popular vessel type for disposal amid the depressed dry bulk freight rates. A high business has been recorded during the last two weeks with secondhand buying appetite surpassing the newbuilding momentum in the dry and wet freight markets, while demolition keeps its pace of high record from the first three months of the year.
Overall, 71 transactions reported worldwide in the secondhand and demolition market for the weeks ending April 13th and 20th, with the highest activity being reported in the secondhand market driven by firm dry bulk carrier purchases and a high scrapping momentum. The newbuilding business has found a support from an unexpectedly relative firm contracting activity in the dry bulk segment and a strong placement of orders for liquefied natural gas carrier vessels. Offshore and LNG newbuilding trends remain always on the centre of investors’ interest boosting the position of South Korean Shipbuilders in the first rankings, also for 2012 against their Chinese rivals that are facing serious delays in vessel deliveries and a slack of new ordering business.

SECONDHAND MARKET
Buying interest is still not impaired by the uncertainty in the freight markets, global trade and tight ship financing conditions as the current lows in asset prices justify vessel purchases with bulk carriers being always in the frontline. There is a positive market position in the dry bulk carrier segment supportive by China’s economic activity that gives always a relief in the oversupplied distressed freight markets with a firmer commodity demand and healthier vessel returns. In the wet market, the buying interest remains intense in the MR and smaller chemical tanker segments, as the status of the crude freight market does not offer a sense of comfort to investors in proceeding with high value purchases, while in the container the S&P activity is still in the doldrums despite the recent firm upturn seen from mid-March and the low asset prices. The fragile consumer confidence in US and European economies adds worries for the stability of this euphoria given the additional capacity due for delivery this year in relation with container trade growth.
Overall, 44 vessels reported to have changed hands during the weeks ending April 13th and 20th, at a total invested capital in the region of US$ 763,83 mil with bulk carriers grasping 61% of the total S&P activity and tankers to follow with a 16% share.  A strong purchasing activity has been reported in the capesize segment with also firm business in the other vessel sizes from panamaxes to handysizes. In the wet market, small tankers below 10,000dwt attracted investors’ interest with only one purchase in the MR segment for a vessel of 50,350dwt built 2012. In the container segment, notable sale has been an enbloc purchase by Greek buyers for two post panamax units of 7,943 TEU built 2006-2007 South Korea at a total price of $96mil, with rumours that the sale may also includes a time charter agreement. In terms of invested capital, the bulk segment attracted about 67% of the total invested capital with liners to follow by holding 16% share.

NEWBUILDING MARKET
In the newbuilding market, there has been a strong activity in the bulk carrier segment that increased the total number of units ordered to 37 at a total deadweight of 1,858,500 tons, posting a 61% increase from the activity being reported at week ending April 6th. Notable order has been in the bulk carrier segment, the 5 kamsarmax units ordered in Japanese yard, Oshima, by Bahri Dry Bulk of Saudi Arabia, while in the tanker segment we have seen a LR1 order placed by Greek player, Sun Enterprises, which is the first order being reported for such vessel size since October of last year.
In terms of invested capital, the total amount of money invested is estimated at region $1,858 billion with 51% of the total number of orders being reported at an undisclosed contract price. In terms of invested capital, the LNG segment appears the most overweight by holding 43% of this week’s total amount of money invested with Golar LNG of Norway placing an order for four 160,000 cu.m units at a price of $200 mil each.

DEMOLITION MARKET
In the demolition market, Bangladesh seems to regain its power steadily with more business sealing in Chittagong due to a renewed confidence on the back of a greater clarity in addressing the new delivery procedures and documentation coupled with the emergence of several more financially stable buyers. Scrap prices in the Indian subcontinent region remain relative flat at $460-$470/ldt for dry / general cargo and close to $500/ldt for wet, while in China price levels are still below $450/ldt. The scrapping appetite continues strong in April with high business before and after Eastern Holidays with bulk carriers being always on the frontline.
During the last two weeks, ending April 13th  and 20th  , 27 vessels reported to have been headed to the scrap yards of total deadweight 1,639,470 tons, with bulk carriers holding 52% share of the total number of vessels reported to have headed in the scrap yards. The first quarter of the year ended with a record of bulk carriers’ disposals, while the current freight market status encourages more intense vessel removals despite the recent upturn seen during April as the BDI was pushed to more than 1,000 points mark during the last days. The overtonnage issue is so crucial for the rest of the year and the next that implies record high demolition activity and record low newbuilding appetite. India remains in the top rankings in terms of the total number of demolition transactions with Bangladesh recently being stepped in more aggressive.
In terms of scrap price, the highest scrap rate has been reported in the reefer segment by India for a vessel of 7,673 dwt with 5,996 ldt built 1985 M/V “AKADEMIK VAILOV” at $510/ldt, including some 37tons of aluminium on board. India remains in the first position by winning 10 of the 27 total demolition transactions, while Bangladesh and China follows with 10 and 7 transactions respectively.

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