Hyundai Heavy Industries saw its orders in January 2013 grew to $2.711bn, massively increased by 212% year-on-year, according to its regulatory filing on February 15.
Its Shipbuilding division contracted a total of $937m, up by 1133% against the same month of last year, and Offshore & Engineering division also sharply rose by 4281% y-o-y to $1.183bn.
Last month, the Korean conglomerate booked new orders including five 14,000-teu boxships, one LPG carrier, three special ships, two floating/fixed offshore facilities, etc.
As of the end of January 2013, Hyundai stood at overall 117 vessels/units, reaching around $22bn, of new orders.
Industrial Plant & Engineering and Green Energy divisions all saw increases of orders contracted by 640% and 45% up to $37m and $32m, respectively.
Meanwhile, Engine & Machinery, Electro Electric Systems and Construction Equipment divisions declined by 32%, 27% and 29% year-on-year to $162m, $143m and $217m.
Meanwhile, Hyundai revealed that it recorded KRW 1.8984trn ($1.76bn) of turnover, up by 2% against the same period of last year - shipbuilding rose by 25% y-o-y to KRW 881bn, offshore and engineering increased by 3% to KRW 340bn, while industrial plant and engineering plummeted by 40% to KRW 63bn.
With Lunar New Year Holidays now approaching, there are continued reports of new business being concluded across many of the major sectors said Clarkson Hellas in its latest weekly report. This past week, conventional ship types across the board were in the forefront.In the dry bulk market, "Frontline and STX Dalian have signed a contract for 4+4 x 181,000 DWT Capesize vessels for delivery every 3 months from July 2014. The total price reported for the four firm vessels is understood to be USD 187 Mill pricing each vessel at USD 46.75 Mill. Norwegian owner Jebsen meanwhile is reported to have placed an order for three firm 81,000 DWT Kamsarmax vessels at the newly formed Japan Marine United (JMU) with pricing just above USD 30 Mill. The deal is understood to include several options and be ordered on a 50/50 basis with JP Morgan. At the smaller end of the market, Nantong Hongqiang received an order for five 15,000 DWT units for delivery in 2014 to an yet unknown buyer" said Clarkson Hellas.
It added that "tanker newbuilding activity this week has been focused on the coated sector with IMT placing an order for two firm and two option 7,000 DWT product carriers at Weihai Samjin, with the firm vessels due to be delivered in 2014. Scorpio have announced to the market they have further extended their investment in MRs and ordered two firm 50,000 DWT chemical/product tankers at Hyundai Mipo. Pricing for these units has been announced at USD 32.5 Mill per vessels and delivery in May & June 2014. The deal includes a further four options for 37,000 DWT vessels, again for delivery in 2014" the shipbroker's report said.
In a separate report, shipbroker Golden Destiny noted that "overall, the week closed with 43 fresh orders reported worldwide at a total deadweight of 1,451,600 tons, posting a 43 % week-on-week increase from previous week due to firm number of contacts in all main vessel segments with offshore vessels grasping the lion share. This week’s total newbuilding business is up by 139% from similar week’s closing in 2012, when 18 fresh orders had been reported, 10 for bulkers, 1 for tankers, 4 gas tankers, 2 liners and 1 passenger/cruise. In terms of invested capital, the total amount of money invested is estimated in the region of more than $922mil, 33 newbuidling deals reported at an undisclosed contract price, with a hefty amount invested in the gas tanker of $268mil, in the container of $360mil and in the car carrier segment of $202,5mil" it said.
It added that in the bulk carrier segment, "Greek owner Golden Union Shipping in collaboration with Cosco Shipyard Group and Lloyd’s Register joined forces to create a prototype order for one kamsarmax vessel, where provision is made for tri fuel propulsion. The vessel will be built as eco friendly design and will be able to run on heavy fuel, diesel fuel or LNG, with delivery in June 2014. One more kamsarmax newbuilding came to light by Norwegian Jebsen for the construction of three 81,000dwt vessels in the new joint venture between Universal Shipbuilding and IHI Marine United, Japan Marine United, for a price of about excess $30mil each. The contract includes several options. The vessels will be built to an advanced eco friendly design and have been ordered on a 50/50 basis with JP Morgan Global Investment Fund.
In the small handysize segment, Chinese shipbuilder Hongqiang Marine HI has confirmed a contract for five 15,000dwt bulker, but no details emerged about the contractor, delivery dates or the price of the contract.
In the tanker segment, Metrostar of Greece seems to have replaced its order placed in November 2010 for four 3,600 TEU containerships with a new contract for six MR tankers, including an option for four more, with delivery from end 2014. In the gas tanker segment, Evergas has placed an order for four more 37,500 cbm LNG carriers at Sinopacific’s Qidong yard for delivery in 2015 at a price believed to be in the region of $64-$70mil each, including an option for four more vessels. The owner has already sealed a 15yrs charter agreement for the newbuildings to transport ethane into Norway from the US Mariner East project.
In the container segment, following last week’s reported deal from Canadian shipowner Seaspan for the construction of five post panamax ships 14,000 TEU, plus five more, it has now ordered four 10,000 TEU containerships at Jiangsu New Yangzi and Jiangsu Yangxi Xinfu for a total price of about $360mil with delivery in 2014. The vessels will be built using Seaspan’s fuel efficient SAVER design and are already assigned to a long term fixed rate timecharter to MOL of Japan. In the liner segment, Nordana Line of Denmark has ordered four multipurpose general cargo vessels of 12,100dwt from Chinese shipbuilder Taizhou Sanfu. The 12,100dwt newbuildings will be built to an improved version of the same owner’s 'Great Dane' design, delivered by Sanfu in 2011. The new version features a heavy-load capability of up to 500 tonnes, from the earlier series’ 300-tonne capability. In addition, eco-friendly features have been added to this version of the 'Great Dane', which has been developed in co-operation among Nordana, the yard and Shanghai Merchant Ship Design. Delivery of the first vessel is scheduled for November 2014, with the remaining ships following in three-month intervals. All four newbuildings will be fitted with portable tweendecks" Golden Destiny concluded.
In December, overall 5.2m dwt worth $6.4bn were contracted, the highest monthly volume of orders placed since January 2012. On the other hand, contracts signed in the full year of 2012 totalled 34.4m dwt worth $80.8bn, which fell by 45% year-on-year in dwt terms.
277 bulkers were placed in 2012, fell by 53% on the previous year, marking the lowest level of bulker ordering since 2001, according to latest date from Clarkson.
In the boxship sector, 70 vessels were ordered last year, a decrease of 71% year-on-year, and recorded the second lowest number of containership contracts, apart from 18 orders in 2009.
On the other hand, the number of orders placed in the gas sector grew by 18% year-on-year to 86 vessels. LPG carrier orders more than doubled from those in 2011 to 51 vessels in 2012, while the number of LNG carriers contracted dropped by 30% y-o-y to 35 orders.
Amid oversupplied market and limited access to ship finance, overall $80.8bn was invested in the full 2012, declined by 21% on the previous year.
Investment in the offshore and gas segments marked $42.8bn and $9bn, accounting for 53% and 11% of total investment. Overall $7.2bn and $6.9bn were invested in the bulker and tanker segments, declined by 57% and 10% year-on-year each.
Meanwhile, newbuilding investment in the cruise sector went up by 47% y-o-y in 2012, worth $7bn (11 vessels) whilst $1.5bn was invested in pure car carriers, comparing with $300 invested in 2011.
The Clarkson Newbuilding Price Index, at the end of December 2012, posted 126.3 points, slightly grew from 125.9 points on the previous month. However, this represents 9.2% decline, the largest y-o-y reduction since 2009 when the index plunged by 22.3%.
Particularly, the boxship segment saw the biggest declines in benchmark newbuilding prices, by falling 18% on 2011. The benchmark LNG carrier newbuilding price set its lowest record since 2006, by posting $199.5m as of the end of last year.
Overall 152.2m dwt was delivered in 2012, representing 7% decline in dwt terms. Especially, a total of 97.7m dwt hit the water in the first half of 2012, the largest volume of tonnage to be delivered in any six month period, whilst the second half of the year saw a reduction in output, with 54.5m dwt entered the fleet.
Global orderbook stood at 4,603 vessels of a combined 259m dwt and 92.8m cgt, at the end of 2012, down by 29%, 34% and 26% year-on-year, respectively. The bulker orderbook plunged by 41% year-on-year in terms of dwt.
Meanwhile, 1,266 vessels of a cumulative 57.5m dwt with an average age of 27.6 years were demolished in 2012. This represents 35% increase in dwt terms. Bulkers topped in demolition volumes, with 60% shares.
In the last week of 2012 the shipbuilding industry recorded 23 orders, according to Fearnleys Weekly report. Most of the contracts have been awarded to STX shipyards.
Namely, BP Shipping of UK has placed an order for 3+2 Suezmax’ and 10+6 Aframax’ at STX Jinhae Shipyard for a reported price of USD 50 mill for the Aframax and USD 60 mill for the Suezmax vessels. Delivery of the vessels will start in 2015.
STX has also secured a contract to build two more 22,000 cbm LPG carriers from Ultranav of Chile. With this order STX has now a total of eight vessels of the same type ordered by Ultranav. The delivery of the two LPGs is planned for 2014.
HHI has also snatched an LPG carrier order in the last week of 2012. Tomza Group from Guatemala has booked a VLGC for a reported price of USD 74 mill. This new VLGC design from HHI will be equipped with the latest G-type main engine and eco hull form in order to save around 10 t/day of fuel compared to the existing VLGCs. Delivery has been scheduled for July 2014.
Shanghai Waigaoqiao Shipbuilding Co, a subsidiary of China Stare Shipbuilding Corporation has bagged an order for six 180000 dwt bulk carriers from an undisclosed European client with delivery scheduled for 2014.
Korean shipbuilding industries are to win more contracts in 2013, comparing with this year, with major orders for offshore facilities, LNG carriers, etc.
Analyst Yang Hyung-Mo, Taurus Investment & Securities of Korea, said "In 2013, Big3 are expected to book overall 22 drillships, 18 semi-submersible rigs, etc. Including $10.2bn of delayed projects, total amount of production-facility orders is estimated to be around $35bn."
He added "Orders for LNG carriers are prospected to increase up to 32-38 vessels, up by at least more than 15% against this year."
Yang forecasted more than 100 MR PCs would be inked in 2013 and orders for boxship would grow by 81-116% from this year.
He suggested Daewoo Shipbuilding & Marine Engineering as a preferred stake, explaining "With options for seven drillships scheduled to be exercised in 2013, Daewoo also holds a dominant place in Vietnam Block B project and is expected to win at least one FLNG in the second half of the next year."
He selected Hyundai Mipo Dockyard for the next preferred stake, saying "Hyundai Mipo will have the biggest benefits from improving MR PC and medium-sized gas carrier markets. Particularly, medium-sized LPG carrier demand would massively increase in 2013."
Particularly, he added "Hyundai Mipo is expected to win around 38 PCs in the full 2012 and is in talks for more than 40 vessels estimated, just in PC segment."
During the first eleven months of this year, a total of 999 vessels of a cumulative 39.9m dwt or 18.8m cgt have been contracted, which plunged by 47% in dwt terms year-on-year. This is the lowest number of contracts since 1999.
According to Clarkson Research's latest report, overall $72.5bn is estimated to have been invested in newbuildings during January-November period, which represents 26% decrease year-on-year.
An estimated $41.4bn (32 drillships totalling $23.1bn, etc.) has been invested in new offshore contracts, taking up 57% of total investment. This has already marked the largest record, exceeding total investment seen in the full 2011, $40bn.
During the same period, Chinese shipyards have booked 16.7m dwt/6.5m cgt or $14bn of newbuildings, while Korean shipbuilders have been placed with 11.9m dwt/6m cgt totalling $26.1bn of orders, Japanese received 9m dwt/2.8m cgt or $5.1bn orders and Brazilian signed 0.6m dwt/0.8m cgt totalling $13.5bn orders.
Meanwhile, a total of 32 chemical tankers have been ordered, increased by 27 vessels contracted in the full last year. Moreover, total number of contracted MR PC and VLCC rose from 52 vessels to 55 and from three to 12 ships, each.
The Clarkson Newbuilding Price Index, which finally made an upturn in October after 15 consecutive months of decline, has fallen again in November. The index recorded 126.8 points in the end of September, which grew to 127.2 points in the end of October. But as of the end of November it dropped again to 125.9 points, decreased by 9.4% from early of this year and recorded the lowest since February 2004 with 124.9 points.
During the first eleven months of 2012, a total of 2,286 vessels of a combined 144.4m dwt/43m cgt have been delivered, with full year deliveries being prospected to reach 162.8m dwt. 2012's total delivery has been slightly downsized due to a slowdown in deliveries in the second half of this year.
Chinese shipyards have delivered overall 1,052 vessels of a cumulative 60.5m dwt/38.7m cgt, of which bulkers accounted for 79% in terms of deadweight, while Korean shipbuilders have made deliveries of 443 vessels of a combined 46.8m dwt/36.8m cgt, during the same period.
As of the end of November, global newbuilding orderbook stands at 93.3m cgt, declined by more than half from 215.2m cgt recorded in September 2008 and recorded the lowest since February 2005.
Bulkers still account for the largest proportion of the orderbook with the 33.4m cgt of bulkers on order representing 36% of the total orderbook. Boxship and tanker secures 18.5m cgt and 14.6m cgt each of orderbook, while offshore vessel (drillship, FPSO, OSV, etc.) and LNG carrier stood on 10.5m cgt and 6.4m cgt of orders, respectively.
From January to November of the year, a total of record-high 1,163 vessels of a cumulative 54.4m dwt have been sold for demolition, including 522 bulkers of a combined 31.3m dwt, 154 containerships, etc.
Ship owners keep enquiring for newbuilding vessels, but actual contracting has slowed down ahead of the Holiday season. According to the latest weekly report from Clarkson Hellas, "as we enter December and the final few weeks of the year, one could be forgiven for thinking that the shipbuilding market would begin to quieten down. Though enquiry does remain a little subdued, the week has seen further reports of new business being concluded, with vessels being ordered across a wide spectrum of sectors and this should provide those (yards) still aiming to hit their yearly order targets a little optimism and potential festive cheer.
In China, the yards continue to remain hungry for business and further ordering has been reported this week in both the tanker and dry bulk sectors. We have seen reports that Cosco Dalian has added to their initial order from last month (at Guangzhou Longxue) by placing a further order for 2+2 x 300,000dwt VLCCs, this time placed with Dalian Shipyard (DSIC). Again pricing is understood to sit in the low/mid USD 80s Mill and deliveries will be from 2H 2014. In other sectors, Precious Shipping is understood to have placed an order at Shanhaiguan shipyard for 2 option 1 x 20,000dwt Cement Carriers. This order is understood to have been signed at a price of USD 24.18 Mill per vessel and delivery is scheduled from 2014 onwards" it noted.
"In Japan, the dry bulk market continues to remain the most oft‐discussed sector with many of the yards understood to be in close discussions for their latest designs ‐ these discussions are understood to be taking place not only in the small and mid‐sized sectors, but up amongst capesizes too. With the yen having weakened against the dollar by over 6% since September, there is certainly some cause for cautious optimism. If this depreciation can continue, then we expect to see a more concerted effort from the yards to compete for new enquiries and will make the next few months very interesting indeed" Clarkson Hellas concluded.
Meanwhile, Piraeus-based shipbroker Golden Destiny noted in a separate report that "overall, the past week ended with 40 fresh order reported on a global basis, for a total deadweight tonnage of 1,572,600 tons, an increase of 33% over the previous week, with the biggest rise coming from the tanker segment. During the same week of 2011, the newbuilding business was standing at 65% higher levels than today with 66 newbuilding orders, 15 for bulkers, 15 for tankers, 3 gas tankers, 5 containers, 1 liner and 23 special projects. In terms of invested capital, the total amount of money invested is estimated at region more than $1,56 bn with 9 orders reported at an undisclosed contract price, said the shipbroker. The offshore and tanker segment appear the most overweight by grasping 38% each of the total amount invested in newbuilding business.
"In the bulk carrier segment, Ariston Navigation of Greece is said to have gove to CSC Jinling Shipyard of China for ordering a seventh Seahorse 35,000 dwt design, including an option for three more. Thailand’s Precious Shipping has placed an order for two cement carriers of 20,000dwt at Shanhaiguan New Shipbuilding for delivery in 2014 at a cost of $24,18mil each. The contract includes an option for one more vessel that would need to be declared by the end of March 2013.
In the tanker segment, D’ AMICO of Italy is on the plans of exercising its option for two MR product tanker vessels in the forthcoming week following its previous orders of four units earlier this year. The company is going to raise equity to fund the newbuildings with expectations to raise about $83mil through the first part of the process. Ceres Hellenic of Greece teamed up with JP Morgan decided to exercise its option for four more 51,000dwt MR product vessels in SPP Shipbuilding of South Korea, from its initial order placed in May. Ceres and JP Morgan have a close relationship through utilization of the Bank’s Global Maritime Investment Fund for private equity requirements. Deliveries are scheduled throughout 2014, but no employment is confirmed. In addition, SPP Shipbuilding of South Korea has won an order from an undisclosed European owner for up to 14 new MR tankers of 50,300dwt at about $33,5mil each with delivery in the third quarter of 2014 to the end of 2015. SPP said: “Additional contracts are expected by the end of this year, since options from previous contracts still left and now we are in talks with shipowners.”
Energy groups are also on the run up of newbuilding plans. BP is expecting to confirm where it would order up to 15 new tankers, up to five suezmaxes and up to ten aframaxes. South Korean yards, Samsung and STX Shipbuilding appear to be the strongest competitors with high specifications demanded by BP. Total France is also in discussions with shipyards for aframax newbuildings that it wishes to secure charter agreements.
In the gas tanker segment, China National Offshore Oil Corporation (CNOOC), one of the largest companies in China is planning to order 14 medium and small sized LNG vessels. Their plans are for four 30,000 cu m LNG vessels and ten 10,000 cum LNG vessels for construction in several medium sized shipyards in China, including Sinopacific Shipbuilding and AVIC Dingheng Shipbuilding" Golden Destiny said.
It added that "in the container tanker segment, further to Jones Act LNG powered containerships being ordered by US based owner Tote, Matson Navigation of US has revealed a project to build a pair of medium size containerships in US at a price of $200mil each. The vessels’ size is understood to be in the region of 2,600 TEU with delivery schedule in the next three to five years, 2015-2017. In the post panamax segment, Seaspan is planning to order four 10,000 TEU boxships at privately owned Yangzijiang Shipbuilding of China with Seaspan boss Gerry Wang saying that the newbuilding cost is likely to be around $90mil each, reflecting very high vessel specifications.
In the offshore segment, Chinese shipbuilder Yangzijiang confirmed that its yard in Jiangyin, Jiangsu, has won an order to construct a self-elevating jack-up rig for the Mena Offshore Investments unit Explorer Ltd. The rig would be based on a Letourneau Super 116E Class design at a value of $170M, including an option of one additional, identical rig. Jiangsu Yangzijiang Offshore Engineering will execute the order, which will be delivered by 2Q15. Executive chairman Ren Yuanlin noted that with this order, Yangzijiang will officially join the offshore oil and gas sector: "We identified offshore as a growing market and have worked hard on adding that exposure to our portfolio for years. “Our perseverance, dedication and commitment have finally paid off with the successful entering of the first rig-building agreement. We will certainly employ our cost and project management expertise into building a track record for offshore products.” Yangzijiang shipbuilding is said also to have been signed a letter of intent with SSP Offshore, a Texas based offshore owner, for the design and construction engineering of a prototype FPSO called SSP. SSP can function as a floating platform storage and offloading ship and can also drill for oil and gas. In addition, China’s Jinhai HI secured its first newbuilding contract in the offshore segment for a self elevating offshore work platform from an undisclosed contractor. The work platform will have 90m legs and an overall length of 78.8m" the report concluded.
Korean shipbuilding industry's stock prices are possibly to response in advance as commercial ship market is expected to improve by the second half of 2013.
Analyst Yoo Jae-Hoon of Woori Investment & Securities said "I see three things".
The first thing is newbuilding prices are getting closer to the bottom, saying "Due to liquidity effect, raw material cost is predicted to rebound and newbuilding prices will slow down and see the bottom."
The second thing is alleviation of tonnage oversupply. Yoo explained global newbuilding orderbook has reached around those from before 2005 and if trade volume increases in 2014 and 2015, then over supplied shipping market will be settled down by 2015.
Lastly, he pointed out "Existing ships are rather aged" and added shipowners seem unavoidable to invest in newbuilding eco-design ships to be competitive.
Meanwhile, Yoo prospected newbuilding prices would rise accordingly around H2 2013 as it would take some time before ship financing market being recovered.
Newbuilding merchant ship market is now led by environmental regulation and tonnage oversupply and it will be controlled by fuel-efficient Eco-Ship afterwards.
Analyst Park Mu-Hyun of E*Trade Securities in Korea said, Tier III standards will become applicable for ships with keel laying after January 1st 2016 and they are expected to require dedicated NOx emission control technologies such as exhaust gas recirculation, or selective catalytic reduction, etc.
Also, the SOx regulation which requires sulphur content in bunker C oil to be cut below 0.1% will be applied to those vessels sailing in ECAs after January 1st 2015.
Park said buying newbuildings equipped with low-rpm ultra-long stroke engine and emission reduction devices is far economically effective than retrofitting existing engines.
Therefore, newbuilding demand for eco ships will grow eventually and as Eco ships are complicated to build he expected "Commercial ship market will recover in line with increasing orders placed at Korean shipbuilders."
Newbuilding order has maintained uptick in November.
According to glinfo.com of China, November saw a total of 227 newbuildings contracted, up by 92 vessels month-on-month. Particularly Chinese shipyards' new order has distinctively increased.
Chinese shipbuilders booked overall 153 vessels in November, 94 ships more than the previous month., which include 16 chemical tanker, 12 bulkers (declined by three ships month-on-month), eight boxships, two offshore drilling platform units, etc. Many of them were ordered by overseas shipowners.
During the same month, other countries except China inked a total of 74 vessels, down by two ships month-on-month. Among them, Korean shipyards contracted overall 29 newbuildings and most of them were placed by European owners, with high-value vessels making up the large proportion.
Besides, Dutch penned 16 vessels and Japanese contracted 11 ships, which declined by four vessels against October.