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Source:Golden Destiny

The week ends with firm secondhand buying appetite in the bulk carrier segment, lower momentum of dry bulk carrier disposals amid the new lows of the freight market and strong MR newbuilding appetite. The continuous fall of the secondhand asset prices stimulates the buying interest of investors that still have a higher preference in the secondhand than newbuilding units on the ongoing instability of the freight market.
Overall, 30 transactions reported worldwide in the secondhand and demolition market, down by 16% week on week with a 35% rise of secondhand activity, 38% lower newbuilding transactions and no rise in dry bulk carrier disposals. At similar week in 2011, the total S&P activity was 13% higher than the current levels, when 34 transactions had been reported and secondhand ship purchasing activity was 61% lower than the ordering business.

The bulk carrier’s purchasing activity keeps robust by attracting the lion share of the total S&P transactions reported, as in the previous week with a total of 10 S&P transactions. Investors are eyeing in all vessel sizes at the current alluring prices. Panamax dry bulk carriers to handysizes of all ages were on the spotlight this week with only one handysize resale reported compared with the previous week’s firm resale buying appetite.
Overall, 23 vessels reported to have changed hands this week at a total invested capital in the region of US$ 218,9 mil, 7 deals reported at an undisclosed sale price, with bulk carriers holding 43% of the total S&P activity, and tankers 17%. In terms of the reported number of transactions, the S&P activity is up by 35% from last week’s activity with a 25% rise of purchasing momentum in the bulk carrier segment, while is up by 4.5% comparable with previous year’s weekly S&P activity, when 22 vessels induced buyers’ interest at a total invested capital of about $243 million, with bulk carriers holding 32% and gas tankers 41% of the total volume of S&P activity. In terms of invested capital, the bulk carrier appears the most overweight by attracting about 55% of the total amount invested, while container segment is still the least attractive among tanker and bulk carriers.

In the newbuilding market, firm business for MR tanker vessels has kept a steady pace of fresh orders worldwide at an average 20 units per week, while the offshore segment does not show buoyant volume of new orders. No fresh activity has been reported in the bulk carrier segment, while containership new orders in the sub-panamax segment came to light from Greek owners.
Overall, the week closed with 15 fresh orders reported worldwide at a total deadweight of 452,000 tons, posting a 38% week-on- week decline, with a 100% and 78% decline in bulk carrier and offshore newbuilding business, while tankers grasped the lion share, 53% of this week’s newbuilding business. At similar week closing in 2011, the newbuilding business was up by 73%, when 56 fresh orders had been reported with bulk carriers and tankers grasping 50% share of the total ordering activity. In terms of invested capital, the total amount of money invested is estimated at region $384 mil with 26% of the total number of orders being reported at an undisclosed contract price. The tanker segment appears to be the most overweight by holding 42% of this week’s total invested capital through the placement of eight new MR product tankers.
In the tanker segment, Odfjell, the Bergen chemical carrier and tank terminals group, said it has placed an order with South Korean builder Hyundai Mipo Dockyard for four 46,000dwt chemical carriers valued at about $160M en bloc. According to an Odfjell statement, the contract includes options for a further four ships. Each of the vessels will have 22 coated cargo tanks. The ships  will  have  lower  fuel  consumption  than  conventional  vessels.  Deliveries  would  be  from  January  to  July  2014.  “The newbuildings will replace a number of old vessels the company has recycled during recent years,” Odfjell said in the statement. In addition, Korean shipbuilder Dae Sun has won an order for two MR tankers of 50,000dwt from Greek shipowner Aegean Shipping
Management. The 50,000dwt ships are due for delivery in 1Q 2014 and will be built to Lloyd's Register class.
Norwegian shipowner Stolt Nielsen is preparing to build four to six 38,000dwt stainless steel chemical tanker newbuildings and is in contact with South Korean and Chinese yards to bargain the newbuilding price. Singapore owner Wilmar International has ordered two 52,000dwt product tankers, plus two options, for delivery in 2015. The contract price has not been revealed but it is believed to be in the region of $30mil each.
In the gas tanker segment, Chinese shipyard Nantong Mingde Heavy Industries signed an agreement with Cambridge Energy Group, a newly formed company focusing on US LNG exports to small-mid sized generation markets, to build five 140,000 cbm LNG carriers, plus for options, and 10-12 LNG carriers of 20,000-40,000 cbm. The agreement marks Nantong Mingde Heavy Industries as the second Chinese yard entering in the construction of LNG carriers following Hudong Zhonghua Shipbuilding. Furthermore, Colar LNG is considering the construction of up to six more 160,000cbm LNG units, but the deal has not yet finalized as the owner is negotiating with the yards to achieve the best low newbuilding price.
In the LPG segment, South Korean chemical and LPG shipping specialist KSS Line has ordered an 84,000m³ VLGC at compatriot yard Hyundai HI for delivery in January 2014 at a price of 83.29Bn won ($73.9M). Belgian gas owner Exmar has secured a two month extension for declaring an option of four more 38,000 cbm units from its initial order in March at a price of $50mil each.
In the container segment, Greek owners have shown their presence with Cape Shipping concluding a deal for two 2,200 TEU boxship units for construction in Guangzhou Wenchong Shipyard at $26mil each to be delivered in 2014. In addition, Eastern Mediterranean has ordered two 2,200 TEU boxship units, with an option for two more, at an undisclosed contract price for delivery in 2014.
In  the  Ro-Pax  segment,  Italy’s  Fincantieri  has  sealed  a  $148M order  for  a  dual-fuel  passenger/car  ferry  from  Société  de Traversiers du Québec of Canada. The 130m-long vessel will have capacity for 800 passengers and 180 cars and is due for delivery in 2014. It has been designed by Finland’s Deltamarin in partnership with Quebec-based Navtec. The ship will have cruise ship-style Diesel-electric propulsion, with four generators that can run on marine Diesel fuel oil or LNG. It will be exceptionally manoeuvrable, according to Fincantieri, with electricity-powered Azimuth thrusters equipped with two counter-rotating propellers, as well as transverse propellers. It will have a ‘complex and extensive’ system of ramps and doors at fore and aft for rapid embarkation and disembarkation, the yard said, and would be certified ice class 1A and propulsion class 1AS.

In the demolition market, the price momentum in the Indian subcontinent region has remained flat during the last days of July with levels at $375-$380/ldt for dry/general and $400-$410/ldt for wet cargo and hard competition between Bangladesh and India. The Indian ship-recycling industry will keep its appetite on securing tonnage by trying to offer firm prices as the ruling of Supreme Court did not impose the closure of the scrap yards, but it decided that ships not complying with the Basel convention would not be allowed to clear inwards for recycling in India. In China, price levels fell by $40/ldt for dry vessels to $310-$310/ldt and $20/ldt for wet to $330/ldt, enlarging the gap with the Indian subcontinent region with stiffer efforts for securing further disposals at the current price levels offered.
The week ended with 7 vessels reported to have been headed to the scrap yards of total deadweight 366,304 tons. In terms of the reported number of transactions, the demolition activity is down by 63% from previous week’s business with 67% lower tanker disposals and low pace of bulk carrier scrapping. In terms of total deadweight sent for scrap, there has been a decline of 51%, 3 bulk carrier, 2 tanker and 2 Ro-Ro disposals. In terms of scrap price levels, notable demo deals in the tanker segment the disposal of M/T “UNITED RESOLVE” of 144,100dwt built 1992 with ldt:19,960 at $440/ldt Pakistan.
At a similar week in 2011, demolition activity was 72% higher than today’s levels, in terms of the reported number of transactions, when 12 vessels had been reported for scrap of total deadweight 718,838 tons with bulk carriers 42% and liners 33% of the total number of vessels sent for disposal. Scrap prices were floating at stronger levels with India and Pakistan offering $500-$520/ldt for dry and $525-$545/ldt for wet cargo, while Bangladesh market was inactive.

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