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2012-03-31 09:26:19

March ended with BDI closing today at 1,520 points, up by 65 points (4.1%) decrease from the end of previous week, while at similar week in 2010 the BDI closed at 2,991 points. Capesizes are currently earning $ 10,554/day, a decrease of $164 (1.53%) from a week ago. Panamax rates are averaging $ 15,463/day, a decrease of $ 1,230 (7.4%). Supramax rates are averaging $15,795/day, an decrease of $967 (5.8%). Handysize rates are averaging $11,774/day, an increase of $70(0.6%).
In terms of S&P activity, the week ended with 27 sales reported in the secondhand and demolition market posting a 42.5% negative w-o-w change with buying sentiment being centered again both on bulkcarriers and tankers. The highest activity has been recorded in the secondhand market, while the newbuilding market these last two weeks remains on low levels.
In the secondhand market, 20 vessels reported to have changed hands this week equalling a total amount of money invested in the region of US$ 280,95 million, however six of the reported deals were at undisclosed prices. In terms of reported number of transactions, the S&P activity has been marked with a 20% negative w-o-w change, while is down by 37.5% comparable with previous year’s weekly S&P activity when 32 vessels induced buyers’ interest with bulk carriers again grasping 31.25% share of the total volume of S&P activity. In terms of invested capital, the tanker sector continues to appears to be the most overweight representing almost 80% of the total invested capital this week.
In the newbuilding market, this week ended on similar levels with last week. In total 11 orders were reported, equaling a total invested capital of more than $ 268 million, with 6 of the reported transactions being concluded at undisclosed prices.
In the demolition market, it was a quiet week with just 7 vessels reported to have been headed to the scrap yards of total deadweight 261,467 tons. In terms of reported number of transactions, the Demolition activity has been marked with a 68 % negative w-o-w change, while in terms of deadweight the weekly negative change was around 40%. In terms of scrap rates, the highest scrap rate has been achieved this week by India for a general cargo vessel that seems to obtained $ 483/ldt, with Bangladesh being again out of the market since the situation still remains uncertain.
The Greek presence this week was noticeable both in the secondhand and the newbuilding sector. In the secondhand market 2 transactions appeared in the frontline, one in the Capesize sector and one in the VLCC sector, both from well-known players of the industry, while in the newbuilding sector the investments were centred in the bulkcarrier, gas tanker and once again container sector. The total invested capital remains unknown since no prices have been revealed for the majority of the transactions.

2012-03-26 09:56:30

Demolition and newbuilding business attracted this week a lot of investors’ interest with bulk carriers disposals being on rise and LNG with offshore units being on the spotlight for the placement of new orders.
The highest activity has been reported in the newbuilding market with 37 deals reported in total, but the sentiment in the bulk carrier segment for the construction of newbuilt units remains negative as investors prefer secondhand units at appealing low prices.
Overall, 30 transactions reported worldwide in the secondhand and demolition market, down by 21% week on week due to 47% lower secondhand purchases from soft buying momentum in the crude tanker segment. At similar week in 2011, the total S&P activity was 56% higher, when 47 transactions had been reported and secondhand ship purchasing activity was 108% higher than the ordering business.

SECONDHAND MARKET
The interest is hot for dry vintage and modern units with asset prices being squeezed downwards as the BDI still tries to surpass the 1,000 points mark. In the supramax segment, M/V “LIBRE” of 52,510dwt built 2001 Japan reported sold last week for $14,75 mil to Bangladesh buyers is said to have been failed and committed now to Greek buyers for $14mil. The soft price is said to reflect that the vessel has been recently grounded.
Overall, 11 vessels reported to have changed hands this week at a total invested capital in the region of US$ 150,15 mil, with bulk carriers and tankers grasping 82% share respectively of the S&P activity. In terms of the reported number of transactions, the S&P activity is down by 48% from previous week’s activity, with a 55% fall in bulk carrier purchases, and down by 56% comparable with previous year’s weekly S&P activity when 25 vessels induced buyers’ interest at a total invested capital of about $806,5 million, with bulk carriers and tankers holding 72% of the total volume of S&P activity. In terms of invested capital, the tanker segment appears the most overweight by attracting about 47% each of the total invested capital with the MR enbloc sale of two units with about 47,000dwt built 2004 and 2009 for region $42 mil.

NEWBUILDING MARKET
In the newbuilding market, business picked up again due to a remarkable rise in the tanker segment and strong LNG and LPG placement of orders. Overall, the week closed with 37 fresh orders reported worldwide at a total deadweight of 1,406,400 tons, posting a 147 % week-on-week increase. This week’s total newbuilding business is up by 208% from similar week’s closing in 2011, when 12 fresh orders had been reported with containers grasping 83% share respectively of the total ordering activity. In terms of invested capital, the total amount of money invested is estimated at region $2,4 billion with 22% of the total number of orders being reported at an undisclosed contract price. Notable ordering business has been in the tanker segment with Brazilian OSX winning contract to build eleven 45,000 dwt product carriers to serve cabotage trade for delivery between 2014 and 2017. Tankers and gas tankers have grasped 54% of the total volume of newbuilding activity and offshore 30%, while in the bulk carrier segment a double kamsaramax order revealed by a Chinese player.
In the bulk carrier segment, Cara Shipping of China doubled its kamsarmax newbuilding contract at Shanghai Waigaoqiao from two to four units of 82,000dwt for delivery in 2013 at a price region $30,5 mil each. Cara Shipping is linked with China’s Rizhao Steel. In the supramax segment, Taizhou Kouan Shipbuilding of China is said to have won a contract for 10 units with 51,000 dwt by a domestic owner for delivery between June and December next year at an undisclosed contract price. In the handysize segment, Turkish player GSD Marine is said to be in the process for the construction of two units of 37,000 dwt at Hyundai Mipo Dockyard of South Korea. The order is at the letter of intent stage and not further details have been revealed by the owner.
In the tanker segment, European Navigation of Greece (Elka Shipping) exercised an option at STX Shipping for a third suezmax shuttle tanker with delivery in June 2013 at a price region $93 mil. The previous two were contracted in April 2011 at a price of $100 mil each. An option for one more unit is still on hold, while all the three units ordered have a 15year commitment to Petrobras, Brazil. In the MR segment, Petrobras has now awarded Brazilian OSX a contract to build eleven 45,000 dwt product carriers to serve cabotage trade for delivery between 2014 and 2017. The Petrobras contract is valued at $732 mil and vessels will be leased in London based Kingfish Trading with purchase options.
In the gas tanker segment, Russian owner Sovcomflot has placed two 20,600 cu.m LPG units in Hyundai Mipo for delivery in 2013 at an undisclosed contract price. In addition, Dutch owner Anthony Veder is said to have added two more LPG ethylene carriers of 4,500 cbm at Avic Dingheng Shipbuilding of China for delivery in 2014 at a price excess of $20 mil each.
In the LNG segment, Oman Shipping Company announced that it signed an order for a LNG construction at South Korean Shipbuilder, Hyundai Heavy Industries, with a 162,000 cbm for delivery in 2014. The company said that the vessel will feature dual fuel technology. In addition, Maran Gas Maritime, the gas carrier subsidiary of Greek based Angelicoussis Shipping, has exercised its option for the construction of two more LNG units of 159,800 cum, in South Korea’s Daewoo yard with delivery in 2015 at a price about $200mil each. Maran Gas has now seven 159,800 cum LNG units under construction in Daewoo and four 162,000 cu.m units in Hyundai Heavy Industries. Furthermore, partners in Russia’s YMAL LNG project are in discussions for the design of up to 16 vessels of around 177,550 cbm with ice breaking capabilities to work in harsh Arctic conditions
In the multipurpose liner segment, China Navigation Co. has ordered four units, with option for six more, of 39,000dwt in Chengxi Shipyard, China at a price region $23mil each for delivery in 2013-2014. The vessels are eco friendly design and will burn only 18 tonnes per day on a speed of 14 knots.
In the offshore segment, Pacific Drilling of US has confirmed that it has exercised an option for a seventh ultra deepwater drill ship at South Korean Shipbuilder Samsung HI, 60,000 gt vessel for delivery in May 2014 at a total cost, excluding capitalized interest, region of $600 mil. Pacific Drilling CEO Chris Beckett said: “The current strength we see in the market for ultra-deepwater rigs well into 2014 led us to act on this opportunity to order a rig with very favourable delivery timing.” Financing will be provided by a mixture of Pacific Drilling’s recent bond offering, cash flows from ongoing operations and long-term debt. Furthermore, Norwegian offshore specialist STX OSV has won a contract for the construction of one advanced subsea support vessel for Island offshore with delivery in 1q 2014. The contract is worth more than 500M krone ($87M). The vessel will be of Rolls Royce’s UT 737 CD design. It will be 96m long and have a 21m beam and will be equipped with a 125-tonne offshore crane and ROV systems capable of operating at depths of up to 3000m. STX OSV has also secured a contract for one more offshore subsea construction vessel from DOF Subsea of Norway at a price valued 650m kroner ($113,69m).

DEMOLITION MARKE
In the demolition market, the budget in India has been finally announced with fears that tax increases may push further downwards the price levels offered. Overall, scrap prices remain soft with Bangladesh market being still weak to lift rates at higher levels. The high demand for disposals continues with buyers and their breakers to look for the best available demolition candidates. Price levels offered in Bangladesh are only $25-$30/ldt more than in China and a long waiting time for delivery. China and India seem to be the busiest markets in terms of volume of demolition transactions with Bangladesh and Pakistan being behind. In China, the opening of a new ship recycling facility in Dalian, North China, a joint venture with Singaporean owners, PIL, by the end of the year, opens a new window for further future disposals. India and Pakistan are now paying excess $450/ldt for dry/general cargo and less than $500/ldt for wet cargo. In Bangladesh, the issue of financing remains crucial with cash buyers having difficulties to find end users that can obtain letters of credit. In China, prices are holding below $450/ldt, at region of $410-$430/ldt.
The week ended with 19 vessels reported to have been headed to the scrap yards of total deadweight 1,208,985 tons. In terms of the reported number of transactions, the demolition activity is up by 12% from previous week, with a 140% higher scrapping removals in the bulk carrier segment. Large sized units scrapped this week brought an increase of 73% from previous week, in terms of the total deadweight reported for scrap. In the wet market, the 224,000dwt floating storage tanker M/T “TAURUS” built 1981 reported to have been sent for scrap in Pakistan at $443/ldt. Furthermore, the famous M/T “EXXON VALDEZ” renamed to “ORIENTAL NICETY” reported sold in an Indian scrap yard for $465/ldt. In the dry market, the capesize unit M/V “ANDROS WARRIOR” of about 172,000 dwt built 1986 has been sent in India for $485/ldt.

2012-03-19 09:53:06

Demolition business remains hot with bulk carriers’ scrapping removals being on rise, secondhand purchasing interest is robust for dry units of all sizes and ages at alluring prices with a moderate interest for wet and container units. Newbuilding activity keeps soft, apart from the hike experienced last week, as the uncertainty of the freight markets discourages the strong placement of newbuilding contracts in the main conventional vessel segments.
The highest activity has been reported in the secondhand and demolition market with 21 and 17 deals respectively with a downward trend for newbuilding momentum for the first and the upcoming second quarter of the year.
Overall, 38 transactions reported worldwide in the secondhand and demolition market, up by 2.7% week on week with strong purchases for dry and wet secondhand units. At similar week in 2011, the total S&P activity was 5.2% higher, when 40 transactions had been reported and secondhand ship purchasing activity was 19% higher than the ordering business.

SECONDHAND MARKET
Overall, 21 vessels reported to have changed hands this week at a total invested capital in the region of US$ 257,85 mil, with bulk carriers and tankers grasping 52% and 24% share respectively of the S&P activity. In terms of the reported number of transactions, the S&P activity is up by 5% from previous week’s activity, with a 57% rise in bulk carrier purchases, and down by 16% comparable with previous year’s weekly S&P activity when 25 vessels induced buyers’ interest at a total invested capital of about $306,46 million, with bulk carriers and tankers holding 56% of the total volume of S&P activity. In terms of invested capital, the bulk carrier and gas tanker segments appear the most overweight by attracting about 41% each of the total invested capital. Notable sale has been in the gas tanker segment, the enbloc sale of two LPG units with about 22,000 cbm gas capacity built 2009 China for region
$52,5 mil each.

NEWBUILDING MARKET
In the newbuilding market, trends have been turned to previous weekly levels with an average of newbuilding business less than 20 newbuilding contracts. After the strong activity in the bulk carrier segment of last week, offshore support vessels regained their strength monopolizing this week’s business. The offshore market’s newbuilding appetite will persist high with Maersk Drilling planning to double its existing fleet of 16 semi-submersibles and jack up rigs by 2016, since the offshore oil and gas segment is anticipated to remain high on the back of tough crude oil prices and strong demand. Maersk’s Drilling Managing Director, Jan Holm, said that the present global demand for oil is about six to seven times of what Saudi Arabia produce today and over the next
20 years. He added that the era of “easy oil” is gone and there is an increasing need to find oil in harsher environments and deeper waters. The only potential risk is a dip in E&P expenditures by the oil majors if oil prices retreat, but the current fundamentals do not support a downfall.
Overall, the week closed with 15 fresh orders reported worldwide at a total deadweight of 49,301 tons, posting a 65 % week-on- week decline. This week’s total newbuilding business is down by 29% from similar week’s closing in 2011, when 21 fresh orders had been reported with bulk carriers and containers grasping 52% share respectively of the total ordering activity. In terms of invested capital, the total amount of money invested is estimated at region $2,05 billion with 73% of the total number of orders being reported at an undisclosed contract price. Notable ordering business has been in the offshore segment for a FPSO construction in South Korean Shipbuilder Daewoo Shipbuilding & Marine Engineering for INPEX Corp of Japan with delivery in the second quarter of 2016 at a price of about $2billion.

DEMOLITION MARKET
In the demolition market, Bangladesh market remains under pressure with disappointing price levels offered, while India still grabs the highest activity at levels around $460/ldt for dry and less than $500/ldt for wet units. In terms of volume of demolition transactions, there has been a rise during the year to date from previous yearly levels with 229 vessels reported to have been headed to the scrap yards before the end of March, up by 52% from a similar period last year. In the bulk carrier segment, around 90 vessels are estimated to have been scrapped compared with 52 last year, and more are expected to come on line for disposal as the BDI still hovers below 1,000 points with capesize and panamax earnings being far bellow from $10,000/day.
The week ended with 17 vessels reported to have been headed to the scrap yards of total deadweight 697,988 tons. In terms of the reported number of transactions, the demolition activity is standing at the same levels of previous week, whereas there has seen a 5.6% rise regarding the total deadweight sent for scrap, with a 100% higher scrapping removals in the tanker segment. In terms of scrap price, the highest scrap rate has been achieved this week in the container segment by India for a handy unit of 1,388 TEU with 6,851 ldt built 1992 at $513/ldt. Bulk carriers and tankers have grasped the lion share of this week’s total demotion activity, 53%, with India winning 9 out of the 17 total demolition transactions. At a similar week in 2011, demolition activity was 12% down, in terms of the reported number of transactions, 15 vessels had been reported for scrap of total deadweight 349,507 tons with bulk carriers grasping 47% of the total number of vessels sent for disposal. Scrap prices were floating at current levels. Bangladesh and India had been offering $470-$490/ldt for dry and $495-$515/ldt for wet cargo.

2012-03-12 09:17:03

Demolition business keeps firm, upward business for secondhand units and firm contracts for dry bulk carriers units were the highlights of the first days of March. The highest activity has been reported in the newbuilding market with 43 fresh orders with demolition business seem not enough to balance the threats from over tonnage.
Overall, 37 transactions reported worldwide in the secondhand and demolition market, up by 19% week on week with a 100% higher buying activity in the secondhand market.   At similar week in 2011, the total S&P activity was 24% higher, when 46 transactions had been reported and secondhand ship purchasing activity was 12% lower than the ordering business.

SECONDHAND MARKET
Dry bulk and tanker units continue to be on the spotlight amid freight market slump with alluring asset prices grapping investors’ interest for their fleet expansion via secondhand units. In the container market, the S&P activity remains subdued with asset prices being squeezed downwards. A 910 TEU vessel built 1996 Germany M/V “OSNABRUCK” reported sold this week at region of $4,2mil with cranes 2X45t, while in May last year a 1,131 TEU vessel built Germany with cranes 1x40t had been reported sold for about excess $10 mil.
Overall, 20 vessels reported to have changed hands this week at a total invested capital in the region of US$ 210.5 mil, 3transactions reported at an undisclosed sale price, with bulk carriers grasping and tankers grasping 35% and 55% share respectively of the S&P activity. In terms of the reported number of transactions, the S&P activity is up by 100% from previous week activity mainly due to 450% higher tanker purchases and down by 31% comparable with previous year’s weekly S&P activity when 29 vessels induced buyers’ interest at a total invested capital of about $440,73 million with bulk carriers and tankers holding 76% of the total volume of S&P activity. In terms of invested capital, the tanker segment appears the most overweight by attracting
58% of the total invested capital and bulk carriers to follow with 38% share.

NEWBUILDING MARKET
A fairly amount of newbuilding business has been reported this week with owners being attracted from low prices and eco friendly fuel saving designs. However, expectations remain gloomy for the shipbuilding activity with owners being skeptical about the future placement of newbuilding contracts under the tight ship financing conditions and the recession of freight markets. The interest for gas and offshore units keeps buoyant, which seems the healthiest segments in terms of supply and demand outlook with growth opportunities for trade and vessels earnings. In the container segment, some fresh newbuilding contracts came to light but not in the post panamax segment, which used to be the most fashionable size by major liner operators last year. In the bulk carrier segment, more intense newbuilding business has been seen this week in all size categories; however the glut of ships still hunts the future of the dry bulk newbuilding industry.
Notable order has been reported in the offshore segment with South Korean shipbuilder, Hyundai Mipo, winning an order for a construction support vessel for a European undisclosed owner in a bid to diversify from more conventional vessel sectors, containers, bulkers, tankers, into more specialized units.
Overall, the week closed with 43 fresh orders reported worldwide at a total deadweight of 1,712,660 tons, posting a 169 % week- on-week increase due to 750% and 250% more intense newbuilding contracts for dry bulk carriers and LPG tanker units. This week’s total newbuilding business is up by 30% from similar week’s closing in 2011, when 33 fresh orders had been reported with bulk carriers, and containers grasping 43% and 18% share respectively of the total ordering activity. In terms of invested capital, the total amount of money invested is estimated at region $1,06 billion with 35% of the total number of orders being reported at an undisclosed contract price. In terms of invested capital, the most overweight segments are bulk carriers and LPG by attracting 44% and 22% respectively of the total amount invested for newbuilding units.
In the bulk carrier segment, Greek London based Lomar Shipping has placed two units of 64,000 dwt under construction in Cosco Zhoushan of China in a new niche eco friendly design, including an option for four more, for delivery in March and June of 2014. In the kamsarmax segment, Oshima Shipbuilding of Japan has won an order for five fuel efficient 82,000 dwt units by National Shipping Company of Saudi Arabia at a price region of $31,5mil each with delivery in mid 2014. In the panamax segment, Dryships of Greece is said to have contracted four 75,750dwt units with ice class 1A specification to be built in Jiangsu Rongsheng at a price region of $34 mil each for delivery in 2014. In the supramax segment, Helikon Shipping of Greece has placed an order for a supramax unit of 57,000dwt in STX Dalian of China at an undisclosed contract price for delivery in 2014.In the handymax segment, China Navigation of Hong Kong has ordered four units of 40,000 dwt, plus an option four more, in CSSC Chengxi, for region USD$23mil each with delivery end 2013. In the handysize segment, a Turkish player has placed one 35,000dwt unit in Cosco Guangdong of China at a price region of $22,5 mil for delivery in 2013.
In the tanker segment, Densa Shipping of Turkey has ordered two LR2 aframax tanker units of 106,000 dwt for delivery in August 2013 at Hyundai HI of South Korea.
In the gas tanker segment, SK Shipping of South Korea has firmed a third 82,000 cu.m LPG unit in Hyundai of South Korea at a price region of $76 mil for delivery in December 2013. In addition, Norwegian shipowner Solvang has added an additional large LPG carrier of 84,000 cu.m in its existing orderbook under construction in South Korean Shipbuilder, Hyundai HI. The contract represents the declaration of an option attached to the order placed last June, set for delivery in December 2013. In the LNG segment, Greek owner Almi Tankers is said to have moved closer to ordering its first LNG carrier, 160,000 cu.m tri-fuel, with Daewoo Shipbuilding offering slot for delivery year end 2014. Sources close to the newbuilding projects said that Almi has also the option for a second slot delivery a year later.
In the container segment, Nordic Hamburg Shipping of Germany has placed an order for two boxship units of 3,400 TEU, with an option for two more, in Guangzhou Wenzhou of China. The yard has a long track record with German owners on smaller units of  1,700-2,500 TEUs, but these will be far the largest built from the builder to date. Furthermore, Nigbo Ocean Shipping of China has placed four units of 1,100 TEU in domestic yard, Yangfan Group, for delivery in 2013.
In the special projects segment, Dutch heavy-lift specialist Rolldock has placed an order to build two 151m-long, multifunction heavy-lift ships. This latest order has been contracted to leading ro-ro and ro-pax builder Flensburger Schifbau-Gesellschaft, with construction expected to start in February 2013 and deliveries are planned for the first half of 2014. The 8,000dwt vessels design permits loading using three different methods, two heavy-load cranes can move cargo weighing up to 700 tonnes, a stern ramp allows for rolling cargo weighing up to 3,000 tonnes and finally the vessel can be submersed by more than 12m to allow cargo to be floated in or out.

DEMOLITION MARKET
In the demolition market, the flurry of vessels available for scrapping in Alang has made difficult for owners to find end buyers with scrap prices still being at moderate levels, below $500/ldt for dry and near to $500/ldt for wet units. Pakistan, which is usually competitive for tankers, seems to be out of the game with limited tanker disposals, while in China prices are still holding around $410-$430/ldt with some light activity being reported for dry units. In Bangladesh, the status remains stressed with recent advice for owners to keep distances from Chittagong with end buyers positioning away from the market due to constant delays, endless paperwork and lack of finance from the local market.
The week ended with 17 vessels reported to have been headed to the scrap yards of total deadweight 660,376 tons. In terms of the reported number of transactions, the demolition activity has been marked with a 19% week-on-week decline, whereas there has seen a 49% decline regarding the total deadweight sent for scrap, due to lower scrapping removals, 38% and 17% for dry bulkers and liners respectively. In terms of scrap prices, the highest scrap rate has been achieved this week in the tanker segment by India for a small unit of 9,312 dwt with 3,402 ldt built 1985 at $700/ldt including 291tons stainless steel and 189 tons solid. Bulk carriers and liners have grasped the lion share of this week’s total demotion activity, 59%, with India winning 11 out of the 17 tota; demolition transactions with China and Bangladesh winning only two vessels each. At a similar week in 2011, demolition activity was standing at similar levels, in terms of the reported number of transactions, 17 vessels had been reported for scrap of total deadweight 959,925 tons with bulk carriers and tankers grasping 59% of the total number of vessels sent for disposal. Scrap prices were floating at current levels. Bangladesh and India had been offering $465-$500/ldt for dry and $490-$525/ldt for wet cargo.

2012-03-05 09:14:39

Demolition business turned again this week to very robust levels, following its small slowdown of previous week, with secondhand buying interest for dry bulk carriers and tankers being hot and newbuilding volume of transactions falling to levels to no more than
20 new contracts reported per week on an average. The highest activity has been recorded in the demolition market with 21
vessels reported heading the scrapyards.
Overall, 31 transactions reported worldwide in the secondhand and demolition market, down by 20% week on week with a 91% higher activity in the demolition market.  At similar week in 2011, the total S&P activity was standing as same levels, when 31 transactions had been reported and secondhand ship purchasing activity was 36% lower than the ordering business.

SECONDHAND MARKET
Overall, 10 vessels reported to have changed hands this week at a total invested capital in the region of US$ 134.6 mil, 4 transactions reported at an undisclosed sale price, with bulk carriers grasping 50% and tankers and general cargo vessels 20% share of the S&P activity.
In terms of the reported number of transactions, the S&P activity is down by 64% from previous week activity mainly due to almost zero activity in the container sector, and down by 37.5% comparable with previous year’s weekly S&P activity when 16 vessels induced buyers’ interest at a total invested capital of about $258,3 million with bulk carriers and tankers holding 69% of the total volume of S&P activity. In terms of invested capital, the bulkcarrier segment appears the most overweight by attracting 87.74% of the total invested capital with tankers and general cargo vessels to follow with 4.8% and 7.4% respectively.

NEWBUILDING MARKET
The downward activity of newbuilding continues with dry bulk and tanker segments experiencing a dearth of business bringing memories of the year 2009, when shipping players had showed a strong conservativeness amid economic turmoil and lower newbuilding prices had emerged. At similar week in 2009, only three new building contracts had been reported, one in the bulk carrier and two in the tanker segment. Cosco Corperation of Singapore is expecting the plunge of newbuilding business to persist with a new direction in newbuilding prices as players are unwilling to pen new orders under the current freight and economic market uncertainty. Wu Zi Heng, vice chairman and president of Cosco, said that there may be a greater pressure on the prices of new vessels as their customers may be reluctant to commit to new orders for vessels in the short terms. The gloomy business outlook has hit Singapore listed Cosco Corp, which reported a 44% plunge in net profit for its financial year 2011.
Overall, the week closed 16 fresh orders reported worldwide at a total deadweight of 560,600 tons, posting a 69 % week-on-week decline from last week’s record business of 52 new orders. This week’s total newbuilding business is down by 36% from similar week’s closing in 2011, when 25 fresh orders had been reported with bulk carriers and containers grasping 28% and 48% share respectively of the total ordering activity, whereas now bulk carriers are now holding only 12.5% of the newbuilding business with offshore units grasping the lion share, 44% share of the total newbuilding transactions. In terms of invested capital, the total amount of money invested is estimated at region $400 mil with 88% of the total number of orders being reported at an undisclosed contract price. In terms of invested capital, the most overweight segment appears to be the offshore and LNG segment with hefty investments for two drilling rigs in Samsung of Korea at about $600 mil each and two LNG units at a total cost of $400 mil.
In the bulk carrier segment, notable order is being reported for two post panamax units of 95,000dwt by Chinese player, Fujian Shipping for construction at Fujian Provincial Communication Transportation group at an undisclosed contract price with delivery in 2014, which are considered to be the largest vessels built by this owner.
In the tanker segment, MR units continue to be more popular newbuilding candidates than crude carrier vessel types with the Kuwait Oil Tanker placing four 46,400dwt units at Hyundai Mipo of South Korea for delivery in August of 2014.
In the gas tanker segment, Norwegian owner, Golar LNG, increased its total orderbook to 13 LNG carriers / FRSU, plus an option of four more units, by adding an order at Samsung Heavy Industries for two 160,000 cu/m LNG units at an aggregate cost of slightly more than $400 mil for delivery in the second half of 2014 and first half of 2015. Furthermore, Japanese utility Chubu Electric Power Co is rumored to be in the process of securing its first two LNG newbuilding units of 155,000 cu.m with delivery in 2015.
In the offshore segment, JOHN Fredriksen's drilling rig and drillship owner Seadrill has ordered two drill ships from Samsung in South Korea. “As a first step, Seadrill has entered into contracts to build two new ultra-deepwater drill ships at Samsung in South Korea. The construction of the drill ships is scheduled for completion in 2Q14 and 3Q14,” the company said in a statement. Total price per ship is estimated to be under $600MIL each, with Seadrill receiving an additional option for a 2014 delivery drillship. Furthermore, Seadrill noted that it could place more newbuilding orders over the near term, in a sign of firm expectations for the market going forward.

DEMOLITION MARKET
In the demolition market, scrap prices are still soft with vessels being on stream of disposal and India leading the game as Bangladesh still tries to find its strength. The Central Bank of Bangladesh has increased lending rates as the depreciation of its currency against the dollar has resulted in lower dollar reserves. The monetary tightening has made it more difficult for scrap yards to obtain letters of credit; putting pressure on Bangladesh’s scrapping business. Scrap levels for dry units are floating at levels $460-$470/ldt and for wet units near to $500/ldt with China offering below $450/ldt.
The week ended with 21 vessels reported to have been headed to the scrap yards of total deadweight 1,281,029 tons. In terms of the reported number of transactions, the demolition activity has been marked with a 91% week-on-week increase, whereas there has seen a 92.35% increase regarding the total deadweight sent for scrap. In terms of demolition levels, the highest scrap rate has been achieved this week in the tanker segment by Pakistan for a VLCC unit of 269,065 dwt with 34,294 ldt built 1992 at $502/ldt. Bulk carriers have grasped the lion share of this week’s total demotion activity, 38%, with India winning 52.38% and China 24% of the activity. At a similar week in 2011, demolition activity was down by 36% from the current levels, in terms of the reported number of transactions, 15 vessels had been reported for scrap of total deadweight 597,238 tons with bulk carriers grasping 33% and liners
40% of the total number of vessels sent for disposal. India and Pakistan had been offering $455-$465/ldt for dry and $485-$495/ldt for wet cargo, while Bangladesh market had been inactive from the demolition scene.

2012-02-27 09:15:54

A record high newbuilding activity came to light this week for a first time since the beginning of the year due to robust offshore business with secondhand purchasing momentum also fetching very high levels due to strong container purchases. The demolition activity has fallen to record low levels since January with bulk carriers still being in the frontline as popular scrap candidates. The highest activity has been recorded in the newbuilding market with 52 new contracts with the demolition activity standing 78% lower than ordering business.
Overall, 38 transactions reported worldwide in the secondhand and demolition market, up by 8.5% week on week with a 50% higher secondhand buying momentum. At similar week in 2011, the total S&P activity was standing 11% lower than the current levels, when 24 transactions had been reported and secondhand ship purchasing activity was 70% lower than the ordering business.

SECONDHAND MARKET
Dry bulk carriers continue to be on the focus of potential buyers amid the sharp slide of the BDI with containers grabbing for the fist time the lion share of the total secondhand purchasing activity this week.
Overall, 28 vessels reported to have changed hands this week at a total invested capital in the region of US$ 196,4 mil, 5 transactions reported at an undisclosed sale price, with bulk carriers grasping 22% and containers 55.5% share of the S&P activity. Notable sale reported in the crude tanker segment for a suezmax tanker of 150,581dwt built 2004 Japan for $33,5 mil on subjects, in June 2010 a suezmax tanker of 159,996dwt built 2005 Japan had been reported sold for $61mil.
In terms of the reported number of transactions, the S&P activity is up by 55% from previous week activity due to high container purchases not seen again for a long time, and up by 65% comparable with previous year’s weekly S&P activity when 17 vessels induced buyers’ interest at a total invested capital of about $297,65 million with bulk carriers and tankers holding 39% of the total volume of S&P activity. In terms of invested capital, the container segment appears the most overweight by attracting 42.5% of the total invested capital with bulk carriers and tankers to follow with 27% and 28% share respectively.

NEWBUILDING MARKET
Fresh offshore contracting activity again monopolized newbuilding business with some worries that the surge in orders will harm the supply-demand balance, but the key driver for a strong offshore support vessel market is the sustained E&P spending by the refineries. According to STX OSV chief Roy Reite with oil trading at above $100 per barrel the cost of crude oil production is adequately covered, spurring oil explorers to venture to deep waters and harsher environments. A greater number of offshore support vessels will be required to support oil rigs out at sea, resulting in long term fixtures for platform supply vessels and anchor handling tug supply vessels in the active North Sea market.
At the current slump of freight market along with the glut of new ships, the volume of newbuilding contracts remains subdued in the dry bulk carrier and tanker segments with LNG carriers being the second preferable choice, after offshore support vessels, for newbuilding investors.
Overall, the week closed with a record high of 52 fresh orders reported worldwide at a total deadweight of 1,032,640 tons, posting a 189 % week-on-week increase from a 700% boost in the offshore contracting activity. This week’s total newbuilding business is in close parity with similar week’s closing in 2011, when 58 fresh orders had been reported with bulk carriers and containers grasping 43% and 24% share respectively of the total ordering activity, whereas now bulk carriers are holding only 15% of the newbuilding business with offshore units being in the frontline with a 46% share. In terms of invested capital, the total amount of money invested is estimated at region $1,55 billion with 75% of the total number of orders being reported at an undisclosed contract price.
In terms of invested capital, the most overweight segment appears to be the offshore by holding 53% share of the total amount invested for newbuilding units.
In the bulk carrier segment, Yangzijiang Shipbuilding has secured shipbuilding contracts for seven units at an aggregate contract value of $206,2 million since January 2012. Ren Yuanlin, executive chairman of the Singapore listed yard, said that the new contracts secured comprise of 4 units of 82,000 dwt bulk carriers, 2 units of 95,000 dwt and 1 unit of 47,500 dwt without revealing the name of contractors for delivery 2013-2015. Furthermore, the Hong based owned company Crown Ship, established by China’s Sinopacific Shipbuilding to control ships for its own account to bid the dearth of newbuilding business, has placed 6 units of 63,500 dwt with delivery 2013-2014. Sinopacific builder hopes to resell the units to other owner.
In the tanker segment, China Merchants Energy Shipping is planning to expand its fleet by order 10 VLCC units despite the sluggish freight market status. Li Jian Hong, chairman of China Merchants, believes that the time is right to raise their competitiveness through fleet expansion by taking advantage the lower newbuilding prices. China Merchants is working to raise RMB5,56bn ($882,5mil) to purchase the 10 VLCC newbuildings. In the MR product segment, US based ship-owner has booked two 52,000dwt units in South Korea’s SPP Shipbuilding with delivery in the first half of 2014 at a total value of $73 mil. The contracted MR tanker units can ship 2,000 ton more than existing 50,000 dwt tankers, while they are designed eco friendly with fuel consumption  being  reduced  by  about  20%.  The  order  follows  a  confirmed  announced  deal  from  the  Greek  player  Navios Acquisition for the placement of three MR product tankers at an undisclosed Korean yard for a total price of $106,5mil for delivery in the second, third and fourth quarter of 2014. Furthermore, Scorpio Tankers has exercised its option for a 52,000 dwt unit in Hyundai Mipo for $37,4mil with delivery August 2013.
In the gas tanker segment, Stena Bulk of Sweden is planning to expand its LNG fleet from an existing three by planning an order of four more LNG carrier newbuildings at a value of $200 mil each with South Korean shipbuilders, Daewoo Shipbuilding and Marine Engineering and Samsung Heavy Industries based on the positive LNG prospects. The units’ size will range between
160,000-174,000 cu.m for delivery in 2014-2015.

DEMOLITION MARKET
In the demolition market, scrap price levels continue to be soft as supply of tonnage for disposal is surpassing demand under the current sluggish freight market with owners be more than willing to remove their vintage capacity from their fleet. Scrap prices in the Indian subcontinent region for dry units are in the mid / high $400/ldt and excess $500/ldt for wet units, while levels in China are still below $450/ldt. Few deals are reported in the Bangladesh with India still leading the game. Even Bangladesh has opened the market is still very delicate from prompt and timely deliveries as new regulations and paperwork put obstacles in the strength of the major shiprecycling industry.
The week ended with 11 vessels reported to have been headed to the scrap yards of total deadweight 665,973 tons. In terms of the reported number of transactions, the demolition activity has been marked with a 35% week-on-decline due to 50% lower scrapping removals for bulk carriers, tankers and liners, whereas there has been a 47% fall regarding the total deadweight sent for scrap. In terms of scrap rates, the highest scrap rate has been achieved this week in the container segment by India for a 12,861 ldt unit built 1983 at $502/ldt with sufficient fuel for voyage. Bulk carriers have grasped the lion share of this week’s total demotion activity, 55%, with India winning 54% and Bangladesh 18% of the activity. At a similar week in 2011, demolition activity was down by 36% from the current levels, in terms of the reported number of transactions, 7 vessels had been reported for scrap of total deadweight 562,242 tons with bulk carriers grasping 72% of the total number of vessels sent for disposal. India and Pakistan had been offering $455-$465/ldt for dry and $485-$495/ldt for wet cargo, while Bangladesh market had been inactive from the demolition scene.

2012-02-20 09:17:56

The sentiment for secondhand purchasing activity picked up this week in the dry and wet markets. Investors are waiting further slide in secondhand asset prices, driven by the dreadful freight conditions, which will lead to more intense purchases in the coming days.
The week has been marked by a flurry of demolition activity with scrap rates showing some softness, while the newbuilding momentum is still subdued with LNG and offshore investments continue to be at the focus of potential investors. The slump of the freight markets results in low newbuilding demand in the main conventional vessel segments that may squeeze newbuilding prices at lower levels in the forthcoming months.
Overall, 35 transactions reported worldwide in the secondhand and demolition market, up by 25% week on week due to a 200% in secondhand buying momentum. At similar week in 2011, the total S&P activity was standing 11% higher than the current levels, when 20 transactions had been reported and secondhand ship purchasing activity was 33% lower than the ordering business.

SECONDHAND MARKET
The BDI tries to keep its upward pace, but this does not prevent owners from buying dry units at very attractive prices with MR tanker units still being the preferable choice for secondhand investments in the tanker segment.
Overall, 18 vessels reported to have changed hands this week at a total invested capital in the region of US$ 177,05 mil, 2 transactions reported at an undisclosed sale price, with bulk carriers grasping 44% and tankers 33% share of the S&P activity. Notable sale in the bulk carrier segment, the sale of mini cape vessel of 106,660dwt built China 2011 for $32mil and in the tanker segment the enbloc sale of three handymax units of 40,158dwt built 2005/2003 for total $54 mil. In terms of the reported number of transactions, the S&P activity is up by 200% from previous week activity, and up by 80% comparable with previous year’s weekly S&P activity when 10 vessels induced buyers’ interest at a total invested capital of about $386,3 million with tankers holding 40% of the total volume of S&P activity. In terms of invested capital, the bulk carrier and tanker sector attracted 44% and 41% respectively of the total amount of money invested with the secondhand purchasing momentum being 100% and 500% higher in the bulk carrier and tanker segment respectively from previous weekly levels.

NEWBUILDING MARKET
The newbuilding business keeps its downward pace with shipyards feeling the pain from the slump of the freight markets. South Korean Shipyards, Sekwang Heavy Industries and Samho Shipbuilding, are set to finally close after failing to find a buyer, while 21st Century Shipbuilding is running out of work with not receiving new orders for several months now. Ship-owners are not in hurry to sign new deals either for dry or wet units waiting to see the performance of the freight market and the new trends in newbuilding prices.
Overall, the week closed with 18 fresh orders reported worldwide at a total deadweight of 1,402,240 tons, posting a 5% week-on- week decline with 4 transactions reported for bulk carriers, 6 for tankers and for gas tankers. This week’s total newbuilding business is up by 20% from similar week’s closing in 2011, when 15 fresh orders had been reported with bulk carriers and containers grasping 53% share respectively of the total ordering activity. In terms of invested capital, the total amount of money invested is estimated at region $1,32 billion with 1 transaction reported at an undisclosed contract price. The most overweight segment appears to be the LNG segment by attracting 61% of the total invested capital.
In the bulk carrier segment, U-Ming Marine Transport Corp, a member of the Far Eastern Group, placed an order with Shanghai Waigaoqiao  Shipbuilding Co to  build up to 10 capesize vessels at  a price of  region  $49,8mil each  with  delivery in  2014.
Oceanfreight of Greece is said to have received a $120 million loan from China Development Bank ($108mil) and Bank of China ($12mil) for covering the construction of three bulk carriers from Jiangnan Shipyard Group Ltd. for delivery in 2013. The size has not been yet specified, but sources suggest that the units will be kamsarmaxes or mini capesizes.
In the tanker segment, Norwegian shipwoner John Fredriksen has placed an order for four 51,000dwt product tankers, with an option for two more units, for delivery in 2013 at STX Offshore & Shibuilding at a total cost of $209 mil. Furthermore, the owner in an interview in Financial Times unveiled its plans for ordering VLCC units for his newly founded Frontline 2012 defying vessels’ market glut.
In the gas tanker segment, the LNG newbuilding interest is very strong as the demand outlook from the two world’s largest consumers, Japan and South Korea, seems strong and owners are scheduling their investment plans. Sovcomflot of Russia has boosted its LNG orderbook at South Korean shipbuilder STX by declaring an option for two more units from its original contract placed at the end of May last year. Sovcomflot originally contracted two of the 170,200 cu.m LNG units at a price of region $205mil per vessel and now exercised its option for two more similar units with delivery in 4q 2014 and 1q 2015.
Furthermore, Golar LNG has entered into two newbuilding contracts for 162,000 cu.m new buildings with fixed priced options for a further two with the Korean shipbuilder Hyundai Samho Heavy Industries Co., Ltd. ("Hyundai") for delivery during the third quarter of 2014 and the other will deliver during the fourth quarter of 2014. The total cost of the two vessels is slightly above $400 million. Also, Greek player Dynagas is rumoured to be behind the order for an additional LNG pair, of 162,000 cbm, in South Korean Shipbuilder Hyundai Heavy Industries that are scheduled for delivery in the following year, after confirming four LNG carrier newbuildings of 155,000 cbm last year. In last, Chinese shipbuilders is said to have been asked an indication for their availability to construct two 170,000 cbm LNG carriers that are expected to be owned jointly by UK-listed BG, CNOOC Energy Technology & Services and the Cosco China Mechants joint venture China LNG Shipping (Holdings) Co (CLNG).

DEMOLITION MARKET
In the demolition market, the high interest for the disposal of over-aged tonnage remains with the freight market status urging every week owner’s decision. The oversupply of tonnage for scrapping has brought softness in the competitive scrap prices offered by Alang buyers, but this seems to not prevent owners’ decision from scrapping with Bangladesh attracting some fresh activity and China with Pakistan being behind. Dry bulk carriers of all sizes are in the frontline with handysizes / handymaxes showing very firm disposals and panamaxes to follow. Three capesizes reported to have been sent for scrapping this week and now the tally of capesize disposals has reached 6 vessels for this year compared with 16 panamaxes. In the tanker segment, a VLCC disposal came to light this week of 247,471dwt built 1989 with hopes that others to follow. What is noteworthy is the limited activity in the container segment since the percentage of overaged vessels to the existing fleet, even in the small segments, is small and the scrapping opportunities are limited. Scrap prices for dry units are hovering at $460-$470/ldt in the Indian subcontinent region with China offering $420-$430/ldt, while for wet units are at near to $500/ldt.
The week ended with 18 vessels reported to have been headed to the scrap yards of total deadweight 1,402,240 tons. In terms of the reported number of transactions, the demolition activity has been marked with a 23% week-on-decline, whereas there has been a 52% increase regarding the total deadweight sent for scrap due to VLCC and capesize removals. In terms of scrap rates, the highest scrap rate has been achieved this week in the bulk carrier segment by Bangladesh for a capesize unit built 1989 with lightweight of 17,278tons at $505/ldt. Bulk carriers have grasped the lion share of this week’s total demotion activity, 71%, with India winning 35% and Bangladesh 30% of the activity. At a similar week in 2011, demolition activity was down by 80% from the current levels, in terms of the reported number of transactions, 10 vessels had been reported for scrap of total deadweight 460,379 tons with liners grasping 50% of the total number of vessels sent for disposal. China and Pakistan had been offering $445-$450/ldt for dry and $485/ldt for wet cargo, while Bangladesh market had been inactive from the demolition scene.

2012-02-13 09:43:07

This week ended with hot demolition activity, strong offshore newbuilding business and record lows of secondhand purchasing activity since the beginning of the year. The highest activity has been recorded for a second consecutive week in the demolition market, with 22 vessels in total reported to have been sent for disposal, due to the historical lows of the BDI that encouraged owners for intense vessel removals.
Overall, 28 transactions reported worldwide in the secondhand and demolition market, down by 28% week on week due to a 66% lower secondhand purchasing activity. At similar week in 2011, the total S&P activity was standing 61% higher than the current levels, when 45 transactions had been reported and secondhand ship purchasing activity was 21% lower than the ordering business. The demolition activity is standing 16% higher than the ordering business in terms of volume of transactions and 225% up in terms of total deadweight, while secondhand purchasing activity is 69% lower than newbuilding momentum with subdued ordering interest for bulk carriers and tankers.

SECONDHAND MARKET
The buying momentum for secondhand units showed very weak sentiment after the historical lows of the BDI last week, however asset prices are still pushed downwards and investors will soon emerge in the market with stronger appetite.
Overall, 6 vessels reported to have changed hands this week at a total invested capital in the region of US$ 27,5 mil, 2 transactions reported at an undisclosed sale price, with bulk carriers grasping 66% share of the S&P activity. In terms of the reported number of transactions, the S&P activity is down by 66% from previous week activity, and down by 36% comparable with previous year’s weekly S&P activity when 31 vessels induced buyers’ interest at a total invested capital of about $732 million with tankers holding 55% of the total volume of S&P activity. In terms of invested capital, the bulk carrier sector attracted 46% of the total amount of money invested with the secondhand purchasing momentum being 43% and 86% lower in the bulk carrier and tanker segment respectively from previous weekly levels.

NEWBUILDING MARKET
The newbuilding business remains stagnant with offshore and LNG segments attracting investors’ focus that are seeking for newbuilt vessel to diversify their core business and adjust in new market fundamentals. No fresh activity has been reported this week either in the bulk carrier or tanker segment with subdued sentiment in the freight markets discoursing owners’ decision for new investment plans. South Korean yards with market expertise in the construction of more specialized units will be again the beneficiaries for the year 2012, while consolidation in Japan and China’s Shipbuilding industry is likely to be the key issue in the coming months as a solution to the dried out of newbuilding business and the slide in newbuilding prices.
Overall, the week closed with 19 fresh orders reported worldwide at a total deadweight of 235,200 tons, posting a 90% week-on- week increase due to 75% stronger business for offshore units. This week’s total newbuilding business is down by 51% from similar week’s closing in 2011, when 39 fresh orders had been reported with bulk carriers, tankers and containers grasping 44%, 18% and 26% share respectively of the total ordering activity. In terms of invested capital, the total amount of money invested is estimated at region $1,5 billion with 9 transactions reported at an undisclosed contract price. The most overweight segment appears to be the offshore segment with 14 fresh new orders by attracting 72% of the total invested capital.
In the bulk carrier segment, an Indian utility and mining group, Haryana based Lanco Infratech, is considering a series of 15 or more kamsarmaxes, between 80,000dwt and 85,000dwt, to build its fleet so as to have greater control over its cargoes and reduce its dependence on chartered vessels. The owner is already approaching yards in China and South Korea that are more competitive on newbuilding prices offered. The order is said to be placed by autumn with deliveries in mid 2014.
In the gas tanker segment, Norway’s Hoegh LNG declared its option for a third floating storage and regasification unit of 170,000 cu.m at South Korea’s Hyundai Heavy Industries for a price region $250 mil with delivery in June 2014. There are options for three more, the original two were ordered last year. The booming LNG sentiment encouraged the owner to add one more unit after securing firm contracts to employ the similar vessels ordered last year. Höegh LNG and Perusahan Gas Negara finalised a deal on 25 January to employ the first vessel off Belawan in North Sumatra. Earlier the same week, Höegh said it had won a tender offer to deploy the second FSRU newbuilding, in a project in Klaipeda, Lithuania. CEO Sveinung Stohle said with the two earlier-contracted vessels now employed, a third one was ordered to follow the company’s strategy to grow its footprint in what it believes is a growth segment. Höegh placed 22.6M new shares with investors for 53 kroner ($9.09) per share and lifted about 1.2Bn kroner in fresh equity for financing its third newbuilding, the company said in a separate statement. Furthermore, Russian shipowner Sovcomflot is going to exercise its options for two LNG units of 170,200 cbm ice class 1C tri fuel at STX Offshore and Shipbuilding with delivery at the end of 2014 and early 2015.
In the LPG segment, Hyundai Heavy Industries has won a LPG contract by Pertamina of Indonesia for a unit of 84,000cbm, with an option for one more, for delivery in the second half of 2013. The newbuilding cost of the unit is said to be at $77 mil due to higher specifications than the average design requested by the owner. In addition, partners of Unigas pool are under discussions to place and order for three plus three LPG ethylene carriers of 12,000cbm at a price between $38,5mil and $40mil each. The three partners, Othello Shipping, Schulte and Sloman Neptune, are expected initially to sign up for one vessel each with potential South Korean yards, Daewoo Shipbuilding & Marine Engineering and STX Offshore and Shipbuilding. A final decision will be concluded within the next two or three months.
In the container segment, the Hamburg-based company Peter Dohle has concluded an order for one 4,800 teu unit, with an option for one more, at Jinling Shipyard, for delivery in the first quarter of 2014. Sources reveal that the owner placed the order prior to the Chinese New Year last month at a cost believed to be $55 mil each. The yard is said to be the first time that builds such large units as it has only previously built boxships up to 1,100 TEU.
In the offshore segment, notable order has been revealed by Singapore’s Sembcorp Marine, the world’s second biggest rig builder, for a drill ship contract of $739mil in its Brazilian yard Estaleiro Jurong Aracruz for delivery before 2q 2015. The ship will be based on Jurong Shipyard’s proprietary Jurong Espadon design, which was developed with Norway-based consultant LMG Marin. The design has a 40m-wide main deck, a large moonpool for enhanced drilling, as well as Dynamic Positioning class 3 capabilities and Azimuth thrusters for improved operability. It is capable of operating at 3,000m water depth and drilling to depths of 12,200m, with accommodation for 180 crew. Sembcorp Marine CEO Wong Weng Sun said: “This is a very significant milestone as this order not only represents the first drillship that our group is building for Brazil, but it is also the first project secured by our new shipyard in Aracruz.” The contract is set to contribute to Sembcorp Marine’s earnings in FY2013-15. It could achieve S$52M ($41.7M) net profit over FY2013-15. In addition, Russia’s Sovcomflot is preparing to order up to three seismic vessels as a step to diversify from its core tanker business. The company’s boss stated that the company will order two firm units at a cost of $200 mil at Russia’s state owned United Shipbuilding Corporation.

DEMOLITION MARKET
In the demolition market, the Bangladesh ship recycling industry seems to narrow its gap with its rivals, India and Pakistan, but the import tax issue remains a problem for Chittagong scrap buyers in winning stronger business. India remains in the first rankings by offering the highest level of rates, with some units fetching this week very good levels due to sufficient amount of bunkers. Pakistan is still not so active player even the competitive price levels offered compared with India, while China has returned in the game after the Chinese New Year festivities with softer rates.
The week ended with 22 vessels reported to have been headed to the scrap yards of total deadweight 764,174 tons. In terms of the reported number of transactions, the demolition activity has been marked with a 5% week-on-week increase, with doubled demolition activity in the bulk carrier segment from previous week, whereas there has been a 31% decline regarding the total deadweight sent for scrap due to 86% lower tanker scrapping business. In terms of scrap rates, the highest scrap rate has been achieved this week in the reefer by India for two units built 1993/1994 with lightweight of 5,288tons at $575/ldt. Bulk carriers have grasped the lion share of this week’s total demotion activity, 55%, with India winning 50% of the activity. At a similar week in 2011, demolition activity was down by 36% from the current levels, in terms of the reported number of transactions, 14 vessels had been reported for scrap of total deadweight 451,744 tons with bulk carriers grasping 43% of the total number of vessels sent for disposal. China and Pakistan had been offering $450/ldt for dry and $485-$495/ldt for wet cargo, while Bangladesh market had been inactive from the demolition scene.

2012-01-16 09:43:22

The week ended with high volume of secondhand and demolition S&P transactions, while newbuilding activity is on a downward recession. Overall, 51 transactions reported worldwide in the secondhand and demolition market, up by 155% week on week due to a 300% increase of S&P transactions in the bulk carrier segment. At similar week in 2011, the total S&P activity was standing 31% lower than the current levels, when 35 transactions had been reported and secondhand ship purchasing activity was 54% lower than the ordering business. The highest activity has been recorded in the secondhand market with 29 S&P transactions reported, with the demolition activity standing 70% higher than the ordering business.

SECONDHAND MARKET
The secondhand ship purchasing activity is on high edge during the first days of the New Year with owners seem to revive their purchasing plans stronger after the end of Chinese New Year, when the BDI and asset prices show their new direction. In the tanker segment, the MR buying appetite holds its pace, while in the bulk carrier segment modern and vintage tonnage of all sizes is very alluring for investment. In the container segment, investors remain absent from the S&P scene with the freight market showing signs of revival.
Notable deal of the week in the dry bulk market, the sale of two kamsarmax resales built Tsuneishi Zhoushan for delivery 2012/2013 at price region $32-$33 mil each to Greek buyers, the vessels are said to have been ordered at excess $50 mil each.
In the tanker segment, M/T “MARE DI NAPOLI” 51,371dwt built 2007 SKR reported sold for $27,25 mil, while M/T “SANKO NEPTUNE” & “SANKO NOBLE” of 19,991dwt built 2011 Japan reported sold for $27 mil each.
In the container segment, Diana Containerships Inc. announced the purchase of two panamax container vessels, 4700 TEU from APL, M/V “APL Sardonyx” and M/V “APL Spinel” built 1996 Korea for $30 mil each, icluding 2+1 years time charter back at $24,750/day and $28,000/day.
Overall, 29 vessels reported to have changed hands this week at a total invested capital in the region of US$ 452 mil, 6 transactions reported at an undisclosed sale price, with bulk carriers and tankers being the protagonists by grasping 41% and 24% share respectively of the S&P activity. In terms of the reported number of transactions, the S&P activity is up by 263% from last week’s activity, and up by 7.4% comparable with previous year’s weekly S&P activity when 27 vessels induced buyers’ interest at a total invested capital of about $1,4 billion with tankers holding the lion share, 33% of the total volume of S&P activity. In terms of invested capital, the dry bulk sector appears as the most overweight segment by attracting about 33% of the total amount of money invested and tankers to follow with 24% share.

NEWBUILDING MARKET
New Year opened with fresh business in the bulk carrier and tanker segments being subdued, while offshore ordering activity continues in the frontline. Overall, the week closed with 13 fresh orders reported worldwide at a total deadweight of 153,600 tons, posting a 19 % week-on-week decline. This week’s total newbuilding business is down by 78% from similar week’s closing in 2011, when 58 fresh orders had been reported with bulk carriers grasping 73% share respectively of the total ordering activity. In terms of invested capital, the total amount of money invested is difficult to be estimated as 12 newbuilding orders have been reported at an undisclosed contract price.
In the bulk carrier segment, Chengzi Shipyard in China has won an order for two handymax bulkers of 49,000 dwt by Ningbo Fonwa Shipping for delivery in 2013. The units have been ordered for Chinese domestic coal trading.
In the tanker segment, Stena Bulk of Sweden with its partner Weco Shipping is said to be in discussions for a series of 52,000 dwt product tankers with Chinese yards, Guangzhou Shipyard International and Dalian Shipbuilding, plus a South Korean shipbuilder. The new medium range tankers will operate in the vegoil trade. In the crude market, rumors are circulating for the placement of five VLCC units of 318,000 dwt by Kuwait Oil Tanker in Daewoo of South Korea at a price region $111 mil. Other sources suggesting that Kuwait Oil Tanker has firmed up a contract for four VLCCs and one aframax tanker, while the company is in discussions for four medium range newbuildings with Hyundai Mipo at price region $40 mil. The units will cost more due to company’s high specification requirements.
In the passenger / cruise segment, Viking Ocean Cruises of USA ordered its first deep sea cruise liners of 888 pax in the Saint Nazaire yard of STX France for delivery in April 2014 and 2015.
In the offshore segment, Singapore rig builder Keppel’s US subsidiary Keppel AmFels LLC is said to have secured a contract from Diamond Offshore to construct and upgrade a moored submersible rig for delivery in 3q 2013 at an estimated price region of $150 mil. The rig will be designed to operate in depths of up to 6,000ft and will have a variable deck load of 5,000 long tones, a five ram blowout preventer and quarters capacity for 140 personnel.

DEMOLITION MARKET
In the demolition market, some activity has been witnessed in the Bangladesh region on the news that the green light will be given to the ship recycling industry on January 12th. Scrap prices for dry and wet units remain below $500/ldt with hopes for a firmer rebound on the full reopening of Bangladesh. Pakistan appears to be the most competitive with levels offered $455/ldt for dry and $485/ldt for wet cargo, while China seems to compete with the Indian sub continent region at scrap rates of about $430-$440/ldt.
The week ended with 22 vessels reported to have been headed to the scrap yards of total deadweight 788,248 tons. In terms of the reported number of transactions, the demolition activity has been marked with a remarkable 83% week-on-week increase, due to 233% higher volume of demolition transactions in the bulk carrier segment, whereas there has been a 106% increase regarding the total deadweight sent for scrap. In terms of scrap rates, the highest scrap rate has been achieved this week in the dry bulk segment by Bangladesh for M/V “KANG HUA” with 9,239/ldt at $493/ldt including 500 tons of bunkers. India has attracted 36% of the total demolition activity with China winning 2 bulk carriers at levels xs $400 /ldt. At a similar week in 2011, demolition activity was down by 64% from the current levels, in terms of the reported number of transactions, 8 vessels had been reported for scrap of total deadweight 310,651 tons with bulk carriers and tankers grasping 50% of the total number of vessels sent for disposal. India and Pakistan had been offering $465-$485/ldt for dry and $500-$510/ldt for wet cargo, while Bangladesh market had been inactive from the demolition scene.

GREEK PRESENCE
Greek owners continue their investments in the secondhand market, whereas they are very conservative for new newbuilding transactions. Their total amount of money invested is estimated to be region of $87,7 million for the purchase of two dry bulk handysize units and two small panamax containerships.

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