Lower pricing and growth strategies are still mobilizing the newbuilding business with owners showing a tendency towards niche segments of the shipping market, which appear to be less over-weighted and show greater growth potential. In its latest weekly report, Clarkson Hellas mentioned that "the newbuilding market continues to maintain a relatively healthy level of activity, with further reports of new business being concluded across Dry, Tanker and Gas segments of the market. In Korea – they Big 3 continue to place an emphasis on Offshore and LNG, veering away from a focus on conventional tonnage and leaving this segment of the market open to the Mid-Sized yards, who are now competing hard for the remaining pockets of enquiry that exist. Such requirements continue to be design led and efficiency remains a critical consideration for buyers in what is remains, in broad terms, a tight trading environment.
"In China, appetite for new business from the State and Private sectors shows no sign of relenting – and pressure continues to mount against what is becoming an ever more imminent exposure, in terms of vacant 2H 2013 capacity. There are moves to increase the diversification of existing product mixes and step away from a pure dependence on Dry – however – it remains clear that China remains most competitive on the sector on which it has built its market position – and with time and money invested into the advancement of the full spectrum of Dry designs they remain by far the most compelling commercial avenue in the market. Japan also continues to warm up and with further reports of business being concluded – we may well see the Japanese push a little harder on Dry as the year evolves" concluded Clarkson Hellas.
Meanwhile, in terms of business activity concluded, shipbroker Golden Destiny mentioned, in a separate report that, "fresh offshore contracting activity again monopolized newbuilding business with some worries that the surge in orders will harm the supply-demand balance, but the key driver for a strong offshore support vessel market is the sustained E&P spending by the refineries. According to STX OSV chief Roy Reite with oil trading at above $100 per barrel the cost of crude oil production is adequately covered, spurring oil explorers to venture to deep waters and harsher environments. A greater number of offshore support vessels will be required to support oil rigs out at sea, resulting in long term fixtures for platform supply vessels and anchor handling tug supply vessels in the active North Sea market. At the current slump of freight market along with the glut of new ships, the volume of newbuilding contracts remains subdued in the dry bulk carrier and tanker segments with LNG carriers being the second preferable choice, after offshore support vessels, for newbuilding investors" said Golden Destiny.
It went on to mention that "overall, the week closed with a record high of 52 fresh orders reported worldwide at a total deadweight of 1,032,640 tons, posting a 189 % week-on-week increase from a 700% boost in the offshore contracting activity. This week’s total newbuilding business is in close parity with similar week’s closing in 2011, when 58 fresh orders had been reported with bulk carriers and containers grasping 43% and 24% share respectively of the total ordering activity, whereas now bulk carriers are holding only 15% of the newbuilding business with offshore units being in the frontline with a 46% share. In terms of invested capital, the total amount of money invested is estimated at region $1,55 billion with 75% of the total number of orders being reported at an undisclosed contract price. In terms of invested capital, the most overweight segment appears to be the offshore by holding 53% share of the total amount invested for newbuilding units" stated the Piraeus-based shipbroker.
It went on to report that "in the bulk carrier segment, Yangzijiang Shipbuilding has secured shipbuilding contracts for seven units at an aggregate contract value of $206,2 million since January 2012. Ren Yuanlin, executive chairman of the Singapore listed yard, said that the new contracts secured comprise of 4 units of 82,000 dwt bulk carriers, 2 units of 95,000 dwt and 1 unit of 47,500 dwt without revealing the name of contractors for delivery 2013-2015. Furthermore, the Hong based owned company Crown Ship, established by China’s Sinopacific Shipbuilding to control ships for its own account to bid the dearth of newbuilding business, has placed 6 units of 63,500 dwt with delivery 2013-2014. Sinopacific builder hopes to resell the units to other owner.
In the tanker segment, China Merchants Energy Shipping is planning to expand its fleet by order 10 VLCC units despite the sluggish freight market status. Li Jian Hong, chairman of China Merchants, believes that the time is right to raise their competitiveness through fleet expansion by taking advantage the lower newbuilding prices. China Merchants is working to raise RMB5,56bn ($882,5mil) to purchase the 10 VLCC newbuildings. In the MR product segment, US based ship-owner has booked two 52,000dwt units in South Korea’s SPP Shipbuilding with delivery in the first half of 2014 at a total value of $73 mil. The contracted MR tanker units can ship 2,000 ton more than existing 50,000 dwt tankers, while they are designed eco friendly with fuel consumption being reduced by about 20%. The order follows a confirmed announced deal from the Greek player Navios Acquisition for the placement of three MR product tankers at an undisclosed Korean yard for a total price of $106,5mil for delivery in the second, third and fourth quarter of 2014. Furthermore, Scorpio Tankers has exercised its option for a 52,000 dwt unit in Hyundai Mipo for $37,4mil with delivery August 2013. In the gas tanker segment, Stena Bulk of Sweden is planning to expand its LNG fleet from an existing three by planning an order of four more LNG carrier newbuildings at a value of $200 mil each with South Korean shipbuilders, Daewoo Shipbuilding and Marine Engineering and Samsung Heavy Industries based on the positive LNG prospects. The units’ size will range between 160,000-174,000 cu.m for delivery in 2014-2015" concluded Golden Destiny.