Orders for newbuildings are expected to show an improved picture in the coming weeks, especially if Chinese shipyards return to the market for clients, with a more aggressive marketing and pricing policy, on the back of the fall expecienced in ordering activity.
According to the latest weekly report from Clarksons, “after a dearth in ordering in the large container sector over recent months, it will be interesting to see if the Chinese Yards for one are about to see a fresh batch of ordering, following the support they are now seeing from their domestic Owners. It is understood that China Shipping are now very imminently going to sign contracts for the first 10,000 TEU + ships to be ordered since June this year. This will see a large series of 10,000 TEU Ships penned within the State Yards. With other liner companies who are yet to make a play in the 10,000 + TEU sector still playing a wait and see game over the economies in the West, it will be interesting to see, over the remainder of this year, if they are now forced to play their hand and order to keep up with their competitors or if they will wait and see what the post Lunar New Year brings early next year.
The ability to order by said liner companies will of course be down to the appetite of the Banks to lend and the on-going profitability of main lane liner trade, for which following on from our thoughts last week, the financial debt markets in Europe don’t seem to be able to ease anytime in the near future!
With the Banks in Europe not only being forced to accept a 50% loss on Greek sovereign debt, but also now being forced to further recapitalise it seems the buyers looking to order large series of ships will be forced to look further and further at debt from the Far East. With the next twelve month slot rates for the big contracts now entering full flow too and downward pressure on these also, we will probably see more of a wait and see attitude from the Liner company executives over the next few months rather than seeing them all returning to the Yards to order a vast amount of ships over the coming weeks» said the shipbroker.
In a separate report, Golden Destiny said that the past week ended with newbuilding activity keeping its pace of growth from previous weekly levels due investors’ interest for the placement of new business in the bulk carrier and offshore segment. The bulk carrier segment has grasped the lion share by holding 69% of the total number of units ordered, up 64% from last week’s activity, with a notable order for 10 panamax units of 76,000dwt by Guangdong Lanhai Shipping of China in domestic yard, Yangfan Group, for delivery in 2013-2014.
According to the Piraeus-based shipbroker, “overall, the week closed with 26 fresh orders reported worldwide at a total deadweight of 1,141,000 tons, posting a 63 % week-onweek increase, while is standing at the same levels from similar week’s closing in 2010, when bulk carriers grasped 65% of the total ordering activity with only one contract reported in the offshore segment. In terms of invested capital, the total amount of money invested is estimated at region $1,098 billion with 57.6% of the total number of orders being reported at an undisclosed contract price. The most overweight segment appears to be the offshore by attracting about 86% of the total amount invested, due to mainly a hefty investment reported for a drillship by Atwood Oceanics Inc. of USA at Daewoo of South Korea at a cost of $600 mil, with an option for one more unit” said the report.
In the demolition market, the lower scrapping momentum continued both in terms of volume of transactions and scrap prices. Golden Destiny said that “the recent positive upturn in the dry market with remarkable earnings in the capesize segment, seems to have brought lower pace of bulk carriers disposals, which used to be the driving force behind the high scrapping activity reported so far this year. Scrap prices are still soft among all breaking nations with limited hopes for a prompt rebound due to Diwali celebrations next week and weak Indian rupee against U.S. dollar. India is now paying less than $490/ldt for dry/general cargo and xs $500/ldt for wet cargo, while China has lost some of its power regained in September by offering less than $450/ldt for dry/general and wet cargo. Meanwhile, the situation remains unclear in Bangladesh as the high court hearing that will provide another extension for import scrapping activity has been delayed for next week. The news for the accidental death of 4 persons at one of the local yards in Chittagong adds further pressure on a prompt reopening of the market. In terms of scrap prices, Pakistan emerges as the key player of the industry by offering $480/ldt for dry/general and $510/ldt for wet cargo.
The week ended with 8 vessels reported to have been headed to the scrap yards of total deadweight 213,623 tons. In terms of the reported number of transactions, the demolition activity has been marked with no change from previous weekly levels, but there has been a 14,4% decline in the total deadweight sent for scrap. The dropdown of scrapping business per week is mainly due to lower disposals for bulk carriers and tankers. In terms of scrap rates, the highest scrap has been achieved this week by India for a reefer vessel of 11,779 dwt “CLOUDY BAY” with 6,223/ldt at $495/ldt. India remains in the first rankings by attracting 62.5% of the total demolition activity. At a similar week in 2010, demolition activity was up by 37.5% from the current levels, in terms of the reported number of transactions, 11 vessels had been reported for scrap of total deadweight 347,777 tons with tankers holding 45.4% of the total demolition activity. India and Pakistan had been offering $410-420/ldt for dry and $440-$450/ldt for wet cargo, while Bangladesh market had been inactive from the demolition scene” concluded Golden Destiny.