With the final weeks of the year now upon us, ship owners appear to be moving towards conluding their newbuilding orders’ agreements, before entering the new year. As a result this past week saw a fair amount of deals being concluded. 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 terms of the reported business this week; Shanghai Waigaoqiao are reported to have won a further pair of 206,000dwt Capesize Bulkers from clients of Polembros Shipping. We understand these vessels are the declared optional units from their deal done a little earlier in the year and are provisionally due to deliver End 2013 and 1Q 2014. It is perhaps no coincidence these options have been declared around the time when the Baltic Cape Index has climbed on consecutive days for over a week and has this year increased by over 240% since its low point in January. This upward trend has clearly helped to temper some owners concerns over the forward orderbook and with the current levels of pricing and the general lack of ordering (in this size) this year it is perhaps not surprising to see this latest addition to the orderbook. Pricing for this latest deal is understood to be at the same level as the initial units, in the region of USD 53 Mill per vessel. In other dry news, clients of Kyma Ship Management are reported to have placed an order at Jinhai Heavy Industries for 1 option 1 x 64,000dwt Bulk carriers. The firm unit is expected to deliver in early 2014 and pricing is believed to lie in the region of USD 28 Million” said Clarkson in its report.
In a separate analysis, Piraeus-based shipbroker Golden Destiny said that “on the newbuilding market, the activity remains at low levels, presenting a total 19% decrease comparing to last week. Overall, the week closed with 17 fresh orders reported worldwide at a total deadweight of region 275,800 tons, while the total invested capital cannot be calculated since from the recorded orders, the contract price of just one has been revealed. Bulkcarriers are holding 29.4% of the units and 81% of the total dwt ordered and the offshore sector which was again active holds 41% of the reported orders. Comparing to the activity of similar week of 2010, the activity is down by 56%, when 39 vessels had been reported worldwide at a total deadweight of 2,789,400 tons. In 2010 bulkcarrier orders were holding a 64% and tankers a 25.6% of the total ordering activity” said Golden Destiny.
Including second hand vessel and demolition deals, the week ended with a total of 35 transactions said the shipbroker, a figure up by 52% from previous week and up by 6 % from a similar week in 2010, when 33 transactions had been reported and secondhand ship purchasing activity was 15% lower than the ordering business. Currently, the highest activity has been recorded in the secondhand market, by 53 % while it is interesting to note that this week the reported dwt that went for scrap is 7.7% higher than the ordered capacity. In the second hand market, Golden Destiny said that “for one more week the buying momentum was towards modern units, especially in the bulkcarrier and tanker sector. Tankers hold the lion share both in number of units changing hands but also in terms on the invested capital. Overall, 26 vessels reported to have changed hands this week at a total invested capital in the region of US$ 334.6 mil, with 8 transactions reported at undisclosed price terms. In terms of the reported number of transactions, the S&P activity has increased by 100% from last week’s activity, and down by 3% comparable with previous year’s weekly S&P activity when 29 vessels induced buyers’ interest with tankers grasping 44.8% of the total volume of S&P activity. In terms of invested capital, the tanker sector appears as the most overweight segment by attracting about 72.7% of the total amount of money invested and bulk carriers to follow with 12.3%” concluded Golden Destiny.