After a subdued 2016 in terms of newbuilding orders, 2017 proved to be a totally different story, as owners took advantage of the aggressive pricing from shipyards. In its latest report, shipbroker Allied Shipbroking noted that “the newbuilding market remained overall subdued this year in terms of volume, although overall we did see considerably more activity than what we were noting back in 2016. The freight market rallies noted in the Dry Bulk Sector, helped feed a slightly more speculative attitude in the market, although this was relatively minimal when compared to previous years. In the Tanker market, despite the deteriorating conditions in terms of earnings, we witnessed a renewed interest in new orders, with most likely looking at the market with an opportunistic eye, taking advantage of the lower prices on offer by most shipbuilders. An important fact to point out is that both these sectors have seen their orderbooks decreased in all main size segments. This improved orderbook ratio can be of major importance moving forward, allowing many to take on the option for further ordering in the new year without considerable fear that it would put excessive supply weight on the markets”.
In a separate newbuilding report, Clarkson Platou Hellas said that it was “an interesting week in the newbuilding market, with contracting activity to report across a number of sectors. In tankers, GSI have received a series of orders from domestic owner COSCO Shipping Energy Transportation, with three firm 114,000 DWT Crude Aframax Tankers, two firm 109,900 DWT LR2 Product Tankers and two firm 64,900 DWT Tankers. The vessels will be delivered throughout 2019 and 2021 from GSI’s Nansha facility. In Dry, Shanghai Waigaoqiao Shipbuilding (SWS) have won an order for two firm 208,000 DWT Newcastlemaxes from Foremost Maritime for delivery in 2020. Foremost Maritime have already ordered four Capesize Bulk Carriers at SWS earlier this year. 2020 Bulkers have extended their series of 208,000 DWT Newcastlemaxes at New Times by declaring an option for two additional vessels. Set for delivery in 2019 and 2020, these will be the 3rd and 4th vessels in the series. COSCO Shipping Specialised Carriers have declared an option for one 62,000 DWT Open Hatch Bulk / Pulp Carrier at COSCO Dalian. The vessel will deliver in 3Q 2019 and is backed by a long-term COA to Suzano Pulp and Paper. The Gas market has seen two orders this week, starting with Phoenix Tanker (MOL) placing an order for one firm 82,000 CBM VLGC at Kawasaki Heavy Industries. This will be built from Kawasaki’s Sakaide facility and delivered within 2019. Furthermore, Exmar LPG have announced an order for two firm 79,500 CBM VLGCs which have been contracted at a yet to be named yard, for delivery in 2020. This order has been placed by Exmar having successfully secured a long term TC for the vessels from Statoil. In the Container market, Quanzhou Ansheng in China have ordered twelve firm 640 TEU Container Carriers at three domestic shipyards. The Buyer has awarded four units to Fujian Southeast Shipbuilding, four units to Fujian Mawei Shipbuilding and another four units to Nantong Xiangyu. All vessel will be delivered within 2019”, Clarkson Platou Hellas concluded.
Meanwhile, in the S&P market, Allied noted that “on the dry bulk side, the Christmas holidays seem to have taken its toll on activity, with the week closing off with a significant drop in reported transactions compared to previous weeks. Buying interest seems to have gradually waned over the past couple of weeks, as most investors take a pause to see the direction the market will take in the first few weeks of the New Year which will seem crucial in dictating the tempo the rest of the first half of the year will take. On the tanker side, activity seemed to be slightly firmer, however it is here too that we will likely see a further drop in activity over the coming days as the days close to the Christmas holidays and New Year tend to be slightly sluggish, especially during a period were the freight market is not showing any great signs of exuberance”, the shipbroker concluded.
GasLog Ltd., an international owner, operator and manager of liquefied natural gas (“LNG”) carriers, announced that it has ordered a newbuild 180,000 cubic meter vessel with XDF propulsion from Samsung Heavy Industries (“Samsung”) that is scheduled to deliver in the third quarter of 2019. This vessel is currently unchartered but its early delivery means that it is expected to deliver into a strong LNG shipping market.
Paul Wogan, Chief Executive Officer of GasLog Ltd., commented, “I am very pleased to announce this expansion in our fleet. We have secured this vessel at a very attractive cost and she will be equipped with the latest propulsion and cargo containment technology which will result in highly competitive unit freight costs. The vessel is expected to deliver into a strong LNG shipping market which, according to our estimates, will be short of capacity by the winter of 2019/2020.”
GasLog is an international owner, operator and manager of LNG carriers. GasLog’s fully-owned fleet includes 15 LNG carriers (including 10 ships in operation and 5 LNG carriers on order) and GasLog. GasLog Partners LP, a master limited partnership formed by GasLog, owns a further twelve LNG carriers.
Tor Olav Troim-led 2020 Bulkers has exercised an option for two more Newcastlemaxes at China’s New Times Shipbuilding.
The two bulkers are priced USD 44.7 million apiece and are scheduled for delivery in December 2019 and January 2020 respectively, according to the data from Asiasis.
The order is an option available under a contract 2020 Bulkers signed in October this year, which included two firm orders for 208,000 dwt bulkers at the yard for USD 44.2 million each.
Under the deal, the Norwegian shipowner 2020 Bulkers has four options at the Chinese shipyard, which are set to expire at the end of December if not taken up.
Norwegian 2020 Bulkers recently raised a small amount of fresh capital from investors which are likely to be used to finance the construction of the ships.
Belgium’s owner and operator Exmar has ordered two LPG carriers to support an agreement reached with Norwegian oil major Statoil.
Under the deal between the parties, Exmar’s environment-friendly newbuildings would be deployed to transport LPG in a sustainable manner basis a long-term commitment.
Featuring 79,500 cbm, the gas carriers are to be delivered within 2020 and “will be compliant with the most stringent NOx and SOx emission regulations,” Exmar said.
“The above re-establishes Exmar’s presence into the very large gas carrier (VLGC) segment and reflects the
company’s dedicated efforts to support industrial partners with innovative shipping solutions,” the company concluded.
Chinese shipbuilders have secured the majority of last week’s reported orders, bolstering further China’s status as a top shipbuilding nation.
New Times Shipbuilding has won a contract for the construction of eight 63,000 dwt bulkers from Cyprus-based Frontmarine, according to Allied Shipping Research.
The ships are slated for delivery in 2020 and are valued at USD 26.5 million apiece, pushing the total value of the deal to USD 212 million. The deal is said to include additional options.
Qingdao Wuchuan Heavy Industries has been tied to an order for up to eight 86,000 dwt bulkers. Chinese owner Fujian Guohang Ocean is said to be behind the contract, which includes three firm ships and options for five newbuilds, Asiasis said.
The trio is scheduled for completion in 2019 and is estimated to have fetched around USD 90 million in investment.
South Korean counterpart Hyundai Heavy Industries has reportedly won an order for two 400,000 dwt bulkers from compatriot Hyundai Glovis, while Japanese yards, including Tsuneishi, Sasebo Heavy Industries, and Mitsui Engineering nabbed orders for one small bulker each.
Separately, Chinese Chengxi Shipyard has been linked to an order for up to four 56,000 dwt tankers, placed by HK Kai Sheng International Shipping, data from Allied Shipping shows.
Under the terms of the deal, the Chinese yard will build two tankers, scheduled for completion in 2019 and 2020 respectively. Two additional units are optional.
The newbuildings are priced at around USD 30 million apiece.
Ship owners are contracting newbuilding vessels left and right over the past week, as 2018 and the Holiday Season are just a couple of weeks away. In its latest weekly report, Allied Shipbroking said that it was “another week with plenty of activity being reported in the Newbuilding market, after many weeks of high volatility and sluggish fresh interest noted. At this point, both of the main sectors driving the market, namely the Dry Bulks and Tankers showed a fairly healthy appetite in placing new orders. It is true that the new high reached in the overall Dry Bulk freight index has helped further boost the interest for new orders, changing the mind of many who had second thoughts as to the robustness of the market from the downward correction that was noted in previous weeks. Beyond this however, the surprising aspect to this market has been the activity which came from the Tanker side, where the state of the market with its bearish mode, would seemingly be uninspiring for many potential investors. As things stand down, the trend in the Newbuilding market indicates that we can expect many more interesting projects coming to light before the close of the year, as most will be trying hard to secure both the favorable price levels that are still being quoted as well as the growing options in terms of financing made available from a number of major Chinese shipbuilders”.
In a separate report, Clarkson Platou Hellas said that "in Tankers, Teekay Shuttle Tankers have extended their series of 129,220 DWT DP2 Shuttle Tankers at Samsung Heavy Industries by declaring an option for two additional units. Being the 3rd and 4th vessels in the series, this duo will be delivered in 2Q 2020 and built to be LNG dual fuelled. A couple of orders to report in Dry, starting with Jiangsu New YZJ signing a contract with China Development Bank Leasing for five firm plus five optional 208,000 DWT Newcastlemaxes. The firm vessels are set to deliver throughout 2019 and 2020 and will go on charter to Cargill. On the smaller sizes, Fujian Southeast Shipbuilding have won an order for two firm 20,500 DWT from domestic owners Fujian Anda Shipping and Fujian Shengda Shipping. Delivery is due in 2019", the shipbroker said.
Meanwhile, in the S&P market this week, Allied Shipbroking said that "on the dry bulk side, things lit up this past week, as interest started to re-emerge, especially on the Handysize segment. A fair amount of transactions with a strong focus on the older tonnage helped show that the is still some positive momentum to be had. With overall freight earnings having improved this past week and with the General Index having reached an almost 4 year high point, it may well be the case that competition amongst buyers may well start to intensify once more. On the tanker side, activity dropped back down to the average levels we have become accustomed to during this past year. Prices are still looking to have stabilized, although there is still a fair amount of debate in the market as to how much these price levels reflect reality as there are hardly any "willing" sellers out there that would be moved by such sort of price offers. Given the ongoing lack of transactions, this gap between buyers and sellers is pointed out fairly well".
Similarly, VesselsValue said this week that in the tanker market there is a softening in MR values. "MR2 Tanker Seaways Ariadmar (46,200 DWT, Jul 2004, STX Offshore) sold for USD 11.2 mil, VV value USD 12.22 mil. MR2 Tanker Caletta (51,700 DWT, Apr 2011, Hyundai Mipo) sold to Pallonji Shipping for USD 21.8 mil, VV value USD 23.29 million". In the dry bulk segment, "there has been a softening in Capesize values. Slight firming of Supramax values. Capesize CPO Asia (180,000 DWT, Mar 2011, Daewoo-Mangalia) sold to Seanergy Maritime Corp for USD 25.5 mil, VV value USD 27.66 million. Ultramax Equinox Melida (61,300 DWT, Jun 2016, Dalian COSCO KHI) sold to Vrontados Shipping for USD 25.5 mil, VV value USD 23.63 mil. Supramax vessels Orient Orchid & Orient Jasmine (55,600 and 56,100 DWT, Feb 2012, Mitsui Tamano) sold en bloc to DryLog for USD 35.0 mil, VV value USD 33.86 mil. Handymax Sunroad Mitoya (23,200 DWT, Apr 2011, Kurinoura Dock) sold for USD 8.5 mil, VV value USD 8.49 million", the ships' valuations expert concluded.
Newbuilding ordering activity has picked up pace over the past week, but for the most part, ship owners are still very much focused in the S&P market, which offers much more flexibility of ships’ anc capital’s usage. In its latest weekly report, shipbroker Allied Shipbroking said that “this week we continued to see activity hold firm with interest still on the rise, despite still at relatively soft levels when compared to historical averages. Given the most recently reported contracts we have yet to see any major shift in terms of pricing, while at these price levels a fair share of shipbuilders are still unable to compete and as such hold a seat in the sidelines. It is now surprise that for the moment Chinese shipbuilders are taking up the lion share of new contracts being placed and have even managed to get a strong share in sectors such as that of tankers and containerships, where traditionally they where at a disadvantage when competing with the S. Korean and Japanese yards. This week we witnessed a fair amount of activity split between the dry bulk, tanker and containership segments, all of which have felt a fair amount of pain in their respective freight markets over the past two years and as such could be a possible reflection on the more promising prospects now held by most market participants”, Allied said.
In a separate newbuilding note, Clarkson Platou Hellas said that the was “one order to report in Dry, with DSIC receiving an order for ten firm 25,800 DWT Bulk Carriers from Dalian Success Innovation Group. The vessels are set for delivery in 2019 and 2020 and will be built at Dalian Shipyard Industrial Development, DSIC’s subsidiary. In the Container market, Marlink have extended their series at Fujian Mawei, now backed by Bertram Rickmers’, Rickmers Reederei for a further order of two plus two 1,162 TEU Container Carriers. The scrubber fitted duo are slated for delivery within 2019”.
Meanwhile, in the S&P market, Allied said that “on the dry bulk side, there is still a fair amount of activity being seen in the market though still with limited effect on the overall price levels being seen. Overall it looks as though we may well have some slight downward corrections on some size and age segments which had shown faster paced gains than what they could sustain. At the same time firm buying interest in parts of the Supramax size segment shows that the possibility for further price gains there before the end of the year still holds. On the tanker side, the positive momentum in terms of activity has held for yet another week, with a healthy number of large crude oil carriers changing hands and at relatively firm price levels. Support seems to have finally shown face, with buyers now willing to face the fact that it looks as though this is a low as prices can go for the time being”.
Also, in a weekly note, ships’ valuations expert VesselsValue said that in the tanker market, “values remain stable this week for tankers. Few sales have been seen, with sales exclusively in the VLCC and Suezmax sectors. An en bloc deal bought by Ridgebury Tankers including VLCCs’; DHT Utik (299,500 DWT, May 2001, Daewoo), DHT Utah (299,500 DWT, Jan 2001, Daewoo), DHT Eagle (309,100 DWT, Jan 2002, Samsung) Sold en bloc for USD 66.5 mil, VV value USD 59.46 mil. VLCC Artois (298,300 DWT, Jul 2001, Hitatchi) sold for USD 22.0 mil, VV value USD 19.41. Suezmax Teide Spirit (159,400 DWT, Oct 2004, Daewoo) sold for USD 18.8 mil, VV value USD 19.05 million”.
In the bulker segment, “it has been a quiet week for Bulker sales with values remaining stable. An en bloc deal bought by Ridgebury Tankers to include Capesize vessels; Alexandria VII (178,000 DWT, Feb 2010, Jiangnan Shanghai Changxing), Rhodes VI (178,000 DWT, Jun 2009, Shanghai Waigaoqiao Shipbuilding) Sold en bloc for USD 48.0 mil, VV value USD 49.88 mil. Panama Golden Heiwa (76,600 DWT, Mar 2007, Imabari) sold for USD 13.25 mil, VV value USD 13.41 mil. Handymax Jupiter II (27,000 DWT, Jun 2009, Zhejiang Shipbuilding Co) sold for USD 6.25 mil, VV value USD 6.24 million”, VV said.
Finally, in the container shipping sector, “Post Panamax values softened slightly this week, with Panamax values firming following an en bloc transaction. Handy and feedermax values remain stable. Panamax containers; Apl Oakland (4,730 TEU, Apr 2008), APL Denver (4,730 TEU, Jun 2008), APL Los Angeles (4,730 TEU, May 2008) and APL Atlanta (4,730 TEU, Jul 2008) all built at New Century, sold en bloc for USD 96.8 mil, including a TC of USD 27,500 pd to CNC line until 2020”, VV concluded.
Activity in newbuilding orders seems to have slowed down a bit, compared to the past few weeks, but deals are still being done. In its latest weekly report, shipbroker Intermodal said that “if there is one thing that has constantly exceeded expectations so far this year this is newbuilding activity. The number of recent orders reported last week still shows healthy contracting activity in the sector, with the dry bulkers attracting most of the investment interest out there and perfectly aligning with the trend in the second-hand market. Most of the dry bulk orders still concern vessels of bigger tonnage, with Kamsarmax and Newcastlemaxes being the most popular lately. The revived love for dry bulk newbuildings has undeniably been supporting Chinese yards that still constitute the most popular destination for orders in the sector and that have been struggling to survive amidst the significant slowdown in dry bulk ordering in the past couple of years. Let’s not forget that Chinese yards back in 2015 secured around 36% of all orders confirmed then, while this percentage is estimated at around 26% in 2016 and 27%ytd. In terms of recently reported deals, German owner, Oldendorff Carriers, placed an order for three firm Ultramax bulkers (61,000 dwt) at NACKS, in China for a price in the region of $24.8m and delivery set in 2019”, Intermodal said.
In a separate report, Allied Shipbroking said that “after a week of poor activity in the newbuilding market, many people have been left with questions and uncertainty in terms of what to expect next. With the dry sector taking the lead again and leaving at the same time activity in the tanker side lagging behind, a healthier flow of new ordering has been created, keeping things very interesting in that respect. The main concerns on the other side, the tanker segment, has seen much uncertainty along with tight earnings which have hampered potential investment opportunities that might be in the works. On the other hand, with the freight market in the dry bulk segment showing signs of continued strength and resisting any significant downward movements, we should see in the coming weeks prices firming for modern second-hand sale units. If this trend is strong enough it should in turn push owners to return to the yards if they see second hand units as too costly and not worth the premium of having the asset now”.
Meanwhile, according to Clarkson Platou Hellas, “in Tankers, only one order to report this week with Hyundai Mipo Dockyard (HMD) taking an order from Clients of Central Shipping Monaco for one firm plus one optional 50,000 DWT MR Product Tanker. These will be built from HMD’s Ulsan facility and the firm vessel will be delivered in 1Q 2019. In Dry, Clients of Golden Ocean Group have ordered two firm plus two optional 208,000 DWT Newcastlemaxes at New Times Shipbuilding in China. The two firm units are set for delivery within 2019. For Kamsarmax, Clients of Tomini Shipping have signed a contract for three firm units with Taizhou Kouan for delivery in 2019. More Kamsarmax orders were there for Taizhou Kouan from Clients of. Aquavita International in Ukraine who has also placed an order for one firm plus one optional unit at Taizhou Kouan, which are slated for delivery within 2020”, the shipbroker concluded.
In the S&P market this week, Allied Shipbroking said that “this past week we have witnessed a greater volume of dry bulk sales compared to other segments, with a stronger preference for older vintage units over modern ones. We expect prices for modern second hand units to hold their values due in part to most owners not being sellers in this firming freight market, while owners of recently acquired tonnage looking to be more likely candidates as sellers, especially if they purchased these assets back in 2016. On the tanker front we expect the lack of sales to be partially due to the deteriorating freight market. Its very likely that most owners are reluctant to come down to buyer’s levels and thus we have not seen many transactions concluded. We expect the second hand tanker market to continue to falter for the next few months, until the oil market starts to show a more bullish face which should rekindle the freight market. With this being said, the only tankers reported sold this week were two small chemical tankers”, the shipbroker concluded.
2017 has seen US owners top the list of buyers of distressed tonnage, snapping up vessels sold at bank sales and at auction deals, VesselsValue said.
Asset values reached a 25-year low for bulkers, containers and offshore vessel types in 2016, with a spike in the number of bankruptcies and vessel seizures by banks. US owners have been buying these vessels, spending USD 624.1 million on 52 distressed vessels so far.
This comes in at just under double what Greece has spent, totaling USD 385.3 million. The next country on the list of top buyers is South Korea, having bought a total of 20 ships for USD 228 million.
Top three US companies which have purchased auction/bank sale vessels in 2017 include JP Morgan Global Maritime, Eagle Bulk Shipping and Navios Maritime Partners LP.
In 2016, US companies did not buy any vessels at bank sales or at auction, showing a marked shift in behavior, as explained by VesselsValue.
What is more, the type of vessels companies are buying is incredibly targeted. Specifically, companies have been only purchasing bulkers, containerships and offshore vessels. These asset types hit 25-year historical lows during 2016, with these values now rebounding.
Many in the markets are confident that continued scrapping and a reduction in ordering will balance out supply and demand, bringing asset values back in line. Savvy investors have been getting involved in the last 12 months in order to capitalize on the asset value increase．
China’s Yangzijiang Shipbuilding Holdings Ltd raised its 2017 order win target to $2 billion on Friday after exceeding its previous forecast and reporting a surge in third-quarter profit.
The company received new orders of 59 vessels with a combined value of $1.6 billion, year-to-date, it said in a statement on Thursday, above its previous $1.5 billion forecast and nearly double the 2016 figure.
Yangzijiang’s order book stood at $4.3 billion as of Sept. 30. It expects new orders worth $2 billion for 2018.
Yangzijiang is considering the acquisition of assets and technologies to build liquefied natural gas (LNG) and liquefied petroleum gas (LPG) vessels, Executive Chairman Ren Yuanlin told reporters on Friday.
Net profit rose to 866 million yuan ($130.5 million) in the third quarter, boosted by non-operating gains, from 281.2 million yuan ($42.4 million) a year ago, the company reported late on Thursday.
However, shipbuilding gross margins fell on exchange rate appreciation and an increase in raw material costs, both of which remain a concern for the company.
Shares of the shipbuilder, which has a market value of about $4.8 billion, were trading 4.5 percent higher on Friday, while the broader market was up 0.1 percent.