The aftermath of Posidonia International Fair, which ended 10 days ago, continues to have a negative impact in the newbuilding market, which has remained quiet for yet another week. According to a new report from Clarkson Hellas, "with little new business being concluded last week, it has left many owners taking their time to reflect on the outlook of the newbuilding market and its potential evolution over the remainder of the year. This is not to say however that the market has been totally devoid of activity however and we have still witnessed some interesting reports of new business being concluded, within the container market in particular" said Clarkson Hellas.
It added that "furthermore, it can be argued the market has remained as subdued as it has, because of the continued challenging environment being created by the global financial markets. This perhaps has been exacerbated somewhat this week, with news emerging of yet further turmoil emanating from within the European Union and its ongoing debt “crisis”. As has been repeatedly witnessed over the past year, these shocks in the market, have inevitably lead to a knock on effect in owners access to financial liquidity and hence their subsequent abilities to move in placing fresh orders. That being said however, the reported order this week placed by B.Schulte in tandem with JP Morgan, highlights the fact that there remain attractive opportunities to be found within the markets; across the sectors and that for the right opportunity the financial institutions are still there to offer their support to beleaguered owners. With competition set to remain fierce between the yards as the year progresses, these opportunities will likely continue to materialise and it will be an interesting one to follow as to which owners are able to successfully position themselves to take advantage of these" concluded Clarkson Hellas.
In a separate weekly report, shipbroker Golden Destiny noted that it was yet another week of "intense offshore newbuilding business and light fresh activity for the main conventional vessel segments, bulk carriers and containers, while in the tanker segment no deal was reported. Platform supply vessels, subsea construction vessels and drilling rigs are some of the specialized vessel types that offer new business in the struggling European yards, while Chinese shipbuilders are seeking ways to compete with its rivals and expand in offshore business with South Korean yards having the winning share in the newbuilding market from strong LNG contracting activity.
Overall, the week closed with 35 fresh orders reported worldwide at a total deadweight of 694,900 tons, posting a 150% week-on-week increase due to a 150% increase in the offshore newbuilding activity. This week’s total newbuilding business is down by 84% from similar week’s closing in 2011, when 19 fresh orders had been reported with special project vessels grasping again the lion share, 47% of the total newbuilding business, which implies that 2011 newbuilding trends are being repeated this year. Investors are still moving towards the construction of more specialized units due to the oversupply challenges in the dry and wet markets. In terms of invested capital, the total amount of money invested is estimated at region $1,19 billion with 48% of the total number of orders being reported at an undisclosed contract price. The offshore segment appears the most overweight by holding 68% of this week’s total amount of money invested with a high valued notable jack up drilling contract by Maersk Drilling in Keppel Fels yard of Singapore with delivery in January of 2015" mentioned the Piraeus-based shipbroker.
It added that "in the bulk carrier segment, China’s Yangfan Shipbuilding won an order for two handysize units of 36,100dwt for a Canadian shipowner, Canada Steamship Lines, at a total value of $55 mil for delivery in December 2013. In addition, Jiangsu Hantong Ship HI of China confirmed that it will build a LNG dual fuel supramax bulker of 50,000dwt, which is the first such ship to be built in China, for an undisclosed contractor. The vessel will be delivered in the first quarter of 2014 and will transport finished products between Europe and China on long term contracts.
In the gas tanker segment, Japanese giants NYK and Mitsui OSK Lines is said to be in the process of ordering 160,000cbm LNG carriers on behalf of two utility companies. MOL is expected to contract two ships for Kansai Electric Co., one of which will be built at Kawasaki Heavy Industries and the other at Mitsubishi Heavy Industries. The company is expected to order also one ship at Mitsubishi Heavy Industries for chartering to Chubu Electric Co. NYK is also believed to be in a working partnership with Mitsubishi Heavy Industries for the construction of one ship for Chubu. The contracts are believed to be fully finalized, but they are waiting on board approvals which are not expected until September-October.
In the container segment, German owner Bernhard Schulte and private equity group JP Morgan have jointly ordered a series of five mid-sized containerships of 5,100 TEU, with an option of five more, in Hanjin’s Subic Bay yard, the Philippines unit of South Korean Hanjin Heavy Industries & Construction with delivery from 2014. The boxship units are said to be cost around $45 mil each and are eco friendly designed with a length of 225m, breadth of 37m and 22m in height with a sailing speed of 21.5 knots" said Golden Destiny.
It concluded its report, by mentioning that "in the offshore segment, Rieber Shipping of Norway ordered one ULSTEIN SX 121 subsea construction vessel, with an option for one more, from domestic shipyard Ulstein at a value of NOK 800 million with delivery for the first quarter of 2015. The contractor commented that Norway is a world leader when it comes to design and quality of specialized offshore vessels, which is a determining factor in Ulstein’s success. Furthermore, Maersk Drilling confirmed a third jack up drilling rig from Keppel Fels, Singapore, which is a repeat of a similar order in February 2011, but now costing $50 million more at $650 million, with an option for one more unit.
Norwegian Investment Company Blue Ship Invest, a subsidiary of Ulstein group, has placed an order for four platform supply vessels at Ulstein Verft yard of the ULSTEIN PX 121 design, which are well suited for North Sea and North Atlantic conditions, with delivery in 2013. STX OSV of Norway has signed a letter of intent with Troms Offshore for the design and construction of a new platform supply vessel of 5,700dwt that will be one of the largest PSV’s in the market and will be chartered in a long term contract to Statoil. The vessel is scheduled to be delivered at fourth quarter of 2013 and will be an innovative ship design environmentally friendly with focus on low fuel consumption and low emission of greenhouse gases. STX OSV of Norway has also sealed one of the biggest contracts since its listing in Singapore in November 2010 for an offshore subsea construction vessel from a joint venture between Ocean Installer and Solstad Offshore, one of Norway’s biggest shipping companies. The vessel is scheduled for delivery in the second quarter of 2014 and the contract is subject to board approval by the Norwegian Guarantee Institute for Export Credits, which is expected to be received around June 20th. Furthermore, Germany’s Flensburger Schiffbau yard has won its first contract in the offshore sector as an important milestone for the necessary diversification of the yard, for two seismic survey vessels by a geophysical services company WesternGeco for delivery in 2014".