Dry bulk carriers have continued to be the “weapon of choice” for ship owners around the world, as demand for newbuildings remained on the high during the course of the past week. According to the latest weekly report from Clarkson Hellas, “the level of enquiry in the newbuilding market has continued to remain active this week with interest mainly focused in the Dry Bulk sector; and with the news in the shipping markets being dominated this week by the Chapter XI filing of General Maritime this is perhaps unsurprising, especially when combined with the continued challenging environment within which many tanker owners continue to operate in, that short term interest in tanker newbuildings remains a little subdued. As reported last week, there was a spate of orders placed within China for various sized dry bulk vessels and we continue to see newbuilding opportunities within the Dry Bulk market generating interest amongst owners. The combination of the newer efficient designs and attractive pricing are keeping interest levels high and we expect further business to be concluded in this sector over the coming weeks.
That being said however, there have been no reported dry bulk orders this week and instead we have seen a return to the pattern of earlier in the year with offshore and containership orders being contracted. DSME have this week signed their long discussed deal with the Odebrecht-Technip jointventure for a pair of Subsea pipe-laying support vessels. These have been penned at a reported price of circa USD 500 Mill in total, with deliveries scheduled from 2H 2014. This order continues to highlight the importance of the offshore sector to the major Korean yards and reinforces the view that they will increasingly look to strengthen their position in these specialised sectors as they look towards an uncertain 2012 for the more standard commercial vessel types” said Clarksons.
On a similar mood, Piraeus-based shipbroker Golden Destiny stated that for the second consecutive week, no business has been revealed in the tanker and container vessels segments, with special projects grasping 69% of the total volume of ordering activity. “In the bulk carrier segment, some activity has been revealed in the handysize segment by an undisclosed owner in a Korean yard, while a notable order has been reported in the capesize segment by a Singapore player, The-Hu, in a Chinese yard at a price region $53 mil with delivery in 2013. The significant slowdown of newbuilding business, during the last two weeks, gives positive signals in the already distressed vessels’ supply picture and brings renewed hopes that the market uncertainty seems to have refrained significantly the ordering momentum.
Overall, the week closed with 16 fresh orders reported worldwide at a total deadweight of 285,000 tons, posting a 100 % week-onweek rise, while is down by 79% from similar week’s closing in 2010, when 28 vessels had been reported worldwide at a total deadweight of 1,228,200 tons. Bulk carriers are holding only 18.7% of this week’s newbuilding business compared with a 39% share a year ago. The total amount invested for newbuilding units is difficult to be estimated as 69% of this week’s newbuilding business has been reported at an undisclosed contract price. The amount invested in the bulk carrier segment is region $103mil, when last week was $144 mil for six newbuilding orders” said Golden Destiny.
Meanwhile, in a recent speech during a shipping conference in Athens, BIMCO’s chief shipping analyst, Peter Sand, said that “with the yards being eager to fill their order books, newbuilding prices are likely to fall further, most certainly tempting some owners to place new contracts. But this would merely protract the oversupply situation further. The shipyards on the other hand have a responsibility too and they need to consider other business options seen; with the youngest world fleet ever, building yet more new ships merely to fill yard capacity is simply not a sustainable option for shipping industry as a whole. If newbuilding yards are not closed down to a large extent, the surplus overcapacity gap should rather be used for purposes like retro-fitting of energy-efficiency-improving equipment, scrubbers reducing SOx emissions, repair facilities or a place for green recycling of over-aged tonnage. Alternatively, using the yard facilities for manufacturing e.g. wind mills or large steel structures for roads or buildings might be considered” said Sand.
He went on to mention that “during 2007, a record of 93.6 million CGT was contracted, topping-off an only one-year-old record of 67.8 million CGT in 2006. The break of the crisis resulted in just 15.8 million CGT being contracted in 2009. The industry need to concentrate on fleet replacement, bringing old tonnage to recycling as new ships are delivered. It is certainly not the right time for speculative and asset playing activities in respect of contracting for new ships. The contracting level in 2011 year-to-date provides some optimism as owners appear to be abstaining from another round of excessive contracting” he concluded.