S & P 

Undisclosed buyers are understood to have committed M/V SANKO FRONTIER (74,900 dwt 2011 blt Sasebo) at region excess US$ 29m. We understand that the Vessel had received a number of offers from both European and Far Eastern Buyers.

The Japanese controlled handysize M/V LUPINUS (31,700 dwt 2005 blt Saiki) which has been reported sold for a second time this week at a price region US$ 16.25m to Greek buyers. The vessel was initially committed last week to Turkish interests at xs US$ 17m, but the deal failed when Buyers Board of Directors approval was declined.

After the activity of last week in the Tanker S&P market where we saw a number of sales transacted, it has been a relatively quiet last seven days. The only sale to report is that of the older Aframax M/T FRANKOPAN (101,605 dwt 1995 blt Croatia) which reported sold to Chilean interests at US$ 9.25m.

DEMOLITION 

There remains plenty of activity in the market place and price levels have stabilized or in some cases and surprisingly, improved slightly.

India, the bedrock of the industry for many months now, continue to be the major players. Some 52 vessels had arrived to the anchorage for resale into Alang in February, however many we understand, remain unsold to the breakers or are suffering attempted renegotiations. These problems are now rarely highlighted in the market unlike previous years, which really is a credit to the cash intermediaries who really have brought some exemplary work ethics into the business over recent years, particularly when they are placing deposits into Owners accounts and have the added pressure of some unethical efforts imposed on them by the breakers.

Despite a settled local currency and stable domestic steel market in India, no reasonable price increases are evident due to the large supply of tonnage to the area and some are pleasantly surprised that we have not seen any negative correction in rates. However, the next couple of weeks may see inquiry and activity from India wane whilst the date for the budget draws closer (16th March) as buyers may prefer to hold back from risking numbers pre-budget for later deliveries.

Bangladesh still remains cautious as whilst vessels are being beached, it is reported that there remains lengthy delays completing inward custom formalities and breakers continue to face difficulties opening Letters of Credit. It is hoped that in the future, everything could return to how they used to be, free of any delays or financial issues, to ease the pressure on their counterparts in India.

NEWBUILDING  

With further Holidays in the Far East this week - the market has been a little more subdued this week - however with continuing reports of new business being concluded there is arguably enough opportunity present to keep things interesting.

The burning issue in the market continues to centre around efficiency - and with shipyards and owners continually placing an increased emphasis on improvements in efficiency of ship design, against the backdrop of a bullish outlook for Bunker pricing, there is no doubt that this will continue to be a key factor taken into consideration for those contemplating newbuilding. With substantial efficiency improvements now being offered across the entire spectrum of asset classes - facilitate by improvements in engine designs, energy saving devices and optimised hull forms, there is certainly an argument for buyers to take advantage of new technology and competitive pricing.

This has arguably triggered some activity for both the Dry and Wet sectors so far this year - however - despite improved designs also being offered in the container sector, we have only seen one newbuilding deal concluded so far this year in this sector! This was for a sole 4,800 TEU container vessel at CSC’s Jinling Shipyard and saw a some ten per cent drop in pricing from when the last vessels were contracted of this size in China in June last year.

The small to mid container sector of say 2-5,000 TEU enjoys a very sparse orderbook, especially in terms of a percentage against the Vessels already in the fleet and so with the greater efficiencies these various new designs offer, we do not believe it will be long before we start seeing some more contracts being inked. The interesting thing will be seeing if the Operators will be ordering for their own account, or if it will be Beneficial Owners ordering either on speculation or against long term charter contracts. The even more interesting point for consideration in the current challenging debt climate and typically inability today of the KG’s to support is demand for what was once their bread and butter tonnage, is that will we see a greater number of non-German buyers taking advantage and ordering. In the end, it remains to be seen where the pricing will go today for these container designs, with the Yards, especially in China so very keen for orders of this size at the moment and certainly a story to follow over the upcoming months.

In terms of reported business; In Dry, Clients of “Lomar” have placed an order with COSCO Shipyard for 2+2+2 x 64,000dwt Supramax bulk carriers which will be built at their Zhoushan facility. Although specific pricing has not been disclosed, the firm vessels are understood to be scheduled to deliver in 1Q/2Q 2014 respectively. Meanwhile Clients of “Helikon Shipping” are understood to have placed an order for one further 57K bulker at STX Dalian, with this latest unit due for delivery in 2Q 2014. This will take their total orderbook at the Chinese Yard to five units.

In Tankers, KOTC are reported to have signed 4 x 46,500dwt Product/Chemical Tankers at Hyundai Mipo. These are understood to be scheduled for delivery in 4Q 2013 and throughout 2014 and have been reported to have been signed at a price of circa USD 63 Mill per vessel, but it is understood to be of a bespoke design. STX Offshore & Shipbuilding meanwhile, has reportedly booked a 155,000 dwt shuttle tanker with interests of “European Navigation” for delivery in 2014.

In Gas, Golar LNG are reported to have placed yet further orders at Samsung, ordering another two x 160,000 CBM LNG carriers. The vessel pricing is reported to stand at circa USD 200 Mill per unit and the deliveries are scheduled in 2Q 2014 and 2015 respectively.

Finally in other sectors, Meyer Werft have won a new order from Royal Caribbean Cruises for a 4,100 berth Cruiseship. This vessel in understood to be the declared optional unit, following their similar order placed last year and will be delivered to the buyer 2015. Pricing is believed to lie at around Euros 700 Mill.