There were further reports of new business this week and as we push further into the 2Q of 2012 there is certainly enough volatility amongst the shipyards to make for an interesting environment. In its latest weekly report, Clarkson Hellas said that the situation in China continues to unfurl and yield competitively priced opportunities, with the focus primarily being on Dry Newbuilding resale’s as Shipyards struggle to manage their exposure to their own existing orderbooks.
With an increasing volume of prompt tonnage coming available to the market – there is certainly pressure on the yards to find a quick resolution here and this is dampening values down to levels that seem to be enticing interest from cash rich buyers. There is certainly a trade off here between design and price – as the new designs and later deliveries now on offer from Shipyards are certainly offering considerable efficiency savings against the wash of resales coming into the market – however – with a substantial value gap now emerging between these two opportunities in the market – for the moment price seems to be dominating decision making and a number of owners are gunning for low value and exposed contracts as opposed to a longer terms focus on efficiency” concluded Clarkson Hellas.
In a separate report, Piraeus-based shipbroker Golden Destiny mentioned that in the newbuilding market, there has been a strong activity in the bulk carrier segment that increased the total number of units ordered to 37 at a total deadweight of 1,858,500 tons, posting a 61% increase from the activity being reported at week ending April 6th. Notable order has been in the bulk carrier segment, the 5 kamsarmax units ordered in Japanese yard, Oshima, by Bahri Dry Bulk of Saudi Arabia, while in the tanker segment we have seen a LR1 order placed by Greek player, Sun Enterprises, which is the first order being reported for such vessel size since October of last year. In terms of invested capital, the total amount of money invested is estimated at region $1,858 billion with 51% of the total number of orders being reported at an undisclosed contract price. In terms of invested capital, the LNG segment appears the most overweight by holding 43% of this week’s total amount of money invested with Golar LNG of Norway placing an order for four 160,000 cu.m units at a price of $200 mil each” concluded Golden Destiny.
Meanwhile, in the demolition market, Bangladesh seems to regain its power steadily with more business sealing in Chittagong due to a renewed confidence on the back of a greater clarity in addressing the new delivery procedures and documentation coupled with the emergence of several more financially stable buyers. Scrap prices in the Indian subcontinent region remain relative flat at $460-$470/ldt for dry / general cargo and close to $500/ldt for wet, while in China price levels are still below $450/ldt. The scrapping appetite continues strong in April with high business before and after Eastern Holidays with bulk carriers being always on the frontline. During the last two weeks, ending April 13th and 20th, 27 vessels reported to have been headed to the scrap yards of total deadweight 1,639,470 tons, with bulk carriers holding 52% share of the total number of vessels reported to have headed in the scrap yards. The first quarter of the year ended with a record of bulk carriers’ disposals, while the current freight market status encourages more intense vessel removals despite the recent upturn seen during April as the BDI was pushed to more than 1,000 points mark during the last days. The overtonnage issue is so crucial for the rest of the year and the next that implies record high demolition activity and record low newbuilding appetite. India remains in the top rankings in terms of the total number of demolition transactions with Bangladesh recently being stepped in more aggressive. In terms of scrap price, the highest scrap rate has been reported in the reefer segment by India for a vessel of 7,673 dwt with 5,996 ldt built 1985 M/V “AKADEMIK VAILOV” at $510/ldt, including some 37tons of aluminium on board. India remains in the first position by winning 10 of the 27 total demolition transactions, while Bangladesh and China follows with 10 and 7 transactions respectively” concluded Golden Destiny.