As expected, ship owners have kept their stance of refraining from more newbuilding orders, as oversupply issues have plagued the freight markets during these past few months. With things expected to get worse, from the point of view of tonnage supply, it's only natural that owners limit their newbuilding ordering activity, at least until demand picks up in a series of markets. In its latest weekly report, Clarkson Hellas said that "it has been a quiet week in the Newbuilding market with levels of new enquiry remaining relatively subdued. This is not to say however that the market has been devoid of activity and there have been further reports of new business being concluded in both the Dry Bulk sector in China and Gas Carrier sectors.
As has been previously mentioned in regards to the yards in China - due to the rapid expansion of its shipbuilding capacity over the past few years, the various yards are more and more having to come to terms with this market of limited demand. With this in mind, we have continued to see a softening of pricing as the yards try and bring about a new supply/demand equilibrium where owners will again begin ordering. However, with more of the yards beginning to suggest they are now offering berths at direct cost, it remains to be seen whether this pattern continues or whether a new round of consolidation begins amongst the yards, as the on‐going challenges of the current market further takes its toll.
In Korea meanwhile, the major yards have continued to announce new business within the Offshore sectors and look to be making strong progress towards their order targets for the year. With Pacific Drilling for example now exercising its option at Samsung for its seventh ultra‐deepwater drillship, it now means Samsung is close to having achieved 40% of its order target of 2012. With so much of the major yards revenues last year made up of these offshore projects, it continues to look like 2012, as predicted, will follow the same pattern" concluded Clarkson Hellas.
In a separate and rather contradicting report, shipbroker Golden Destiny mentioned that "business picked up again, due to a remarkable rise in the tanker segment and strong LNG and LPG placement of orders. Overall, the week closed with 37 fresh orders reported worldwide at a total deadweight of 1,406,400 tons, posting a 147 % week-on-week increase. This week’s total newbuilding business is up by 208% from similar week’s closing in 2011, when 12 fresh orders had been reported with containers grasping 83% share respectively of the total ordering activity. In terms of invested capital, the total amount of money invested is estimated at region $2,4 billion with 22% of the total number of orders being reported at an undisclosed contract price. Notable ordering business has been in the tanker segment with Brazilian OSX winning contract to build eleven 45,000 dwt product carriers to serve cabotage trade for delivery between 2014 and 2017. Tankers and gas tankers have grasped 54% of the total volume of newbuilding activity and offshore 30%, while in the bulk carrier segment a double kamsaramax order revealed by a Chinese player" said Golden Destiny.
"In the bulk carrier segment, Cara Shipping of China doubled its kamsarmax newbuilding contract at Shanghai Waigaoqiao from two to four units of 82,000dwt for delivery in 2013 at a price region $30,5 mil each. Cara Shipping is linked with China’s Rizhao Steel. In the supramax segment, Taizhou Kouan Shipbuilding of China is said to have won a contract for 10 units with 51,000 dwt by a domestic owner for delivery between June and December next year at an undisclosed contract price. In the handysize segment, Turkish player GSD Marine is said to be in the process for the construction of two units of 37,000 dwt at Hyundai Mipo Dockyard of South Korea. The order is at the letter of intent stage and not further details have been revealed by the owner.
In the tanker segment, European Navigation of Greece (Elka Shipping) exercised an option at STX Shipping for a third suezmax shuttle tanker with delivery in June 2013 at a price region $93 mil. The previous two were contracted in April 2011 at a price of $100 mil each. An option for one more unit is still on hold, while all the three units ordered have a 15year commitment to Petrobras, Brazil. In the MR segment, Petrobras has now awarded Brazilian OSX a contract to build eleven 45,000 dwt product carriers to serve cabotage trade for delivery between 2014 and 2017. The Petrobras contract is valued at $732 mil and vessels will be leased in London based Kingfish Trading with purchase options.
In the gas tanker segment, Russian owner Sovcomflot has placed two 20,600 cu.m LPG units in Hyundai Mipo for delivery in 2013 at an undisclosed contract price. In addition, Dutch owner Anthony Veder is said to have added two more LPG ethylene carriers of 4,500 cbm at Avic Dingheng Shipbuilding of China for delivery in 2014 at a price excess of $20 mil each.
In the LNG segment, Oman Shipping Company announced that it signed an order for a LNG construction at South Korean Shipbuilder, Hyundai Heavy Industries, with a 162,000 cbm for delivery in 2014. The company said that the vessel will feature dual fuel technology. In addition, Maran Gas Maritime, the gas carrier subsidiary of Greek based Angelicoussis Shipping, has exercised its option for the construction of two more LNG units of 159,800 cum, in South Korea’s Daewoo yard with delivery in 2015 at a price about $200mil each. Maran Gas has now seven 159,800 cum LNG units under construction in Daewoo and four 162,000 cu.m units in Hyundai Heavy Industries. Furthermore, partners in Russia’s YMAL LNG project are in discussions for the design of up to 16 vessels of around 177,550 cbm with ice breaking capabilities to work in harsh Arctic conditions" said the Piraeus-based shipbroker.
It went on to mention that "in the multipurpose liner segment, China Navigation Co. has ordered four units, with option for six more, of 39,000dwt in Chengxi Shipyard, China at a price region $23mil each for delivery in 2013-2014. The vessels are eco friendly design and will burn only 18 tonnes per day on a speed of 14 knots.
In the offshore segment, Pacific Drilling of US has confirmed that it has exercised an option for a seventh ultra deepwater drill ship at South Korean Shipbuilder Samsung HI, 60,000 gt vessel for delivery in May 2014 at a total cost, excluding capitalized interest, region of $600 mil. Pacific Drilling CEO Chris Beckett said: “The current strength we see in the market for ultra-deepwater rigs well into 2014 led us to act on this opportunity to order a rig with very favourable delivery timing.” Financing will be provided by a mixture of Pacific Drilling’s recent bond offering, cash flows from ongoing operations and long-term debt. Furthermore, Norwegian offshore specialist STX OSV has won a contract for the construction of one advanced subsea support vessel for Island offshore with delivery in 1q 2014. The contract is worth more than 500M krone ($87M). The vessel will be of Rolls Royce’s UT 737 CD design. It will be 96m long and have a 21m beam and will be equipped with a 125-tonne offshore crane and ROV systems capable of operating at depths of up to 3000m. STX OSV has also secured a contract for one more offshore subsea construction vessel from DOF Subsea of Norway at a price valued 650m kroner ($113,69m)" concluded Golden Destiny.