A series of large scale new building orders expected to be finalized in the coming weeks in the dry bulk, gas and container segments, experts indicate that we could witness a pre-summer holiday flurry of ordering. In its latest weekly report, Clarksons Hellas mentioned that “the biggest obstacle for yards securing new orders remains the tightness of the financial markets and the on-going challenge for owners to access debt for existing projects, let alone for pre-delivery and post-delivery financing of new orders” it said.
Furthermore, it added that “with the worlds eyes still on the political situation in Greece and its and potential implications on the Eurozone going forward, it is likely that the Greek market will take a wait and see attitude before investing further in newbuildings pre-summer holidays. The Financial markets, after initially reacting positively to the news of the New Democracy victory in last Sundays election, have somewhat softened as the week has progressed and with the news at the end of the week that the credit ratings agency Moody’s having downgraded 15 major global financial institutions, it will sadly no doubt not lead them to lend further money out for new projects when their own cost of borrowing will no doubt rise following the downgrades – this does however remain against the backdrop of competitive asset pricing, so will remain an interesting dynamic to note to what extent the broader economic volatility that exists will stifle demand, or otherwise” concluded Clarksons Hellas.
In a separate note, Golden Destiny reported that overall the past week ended with a “remarkable record activity from a continued increased volume of newbuilding contracts for specialized units. There has been also a noticeable fresh business for bulk carriers, tankers and containers. There has been a 160% and 67% rise in bulk carriers’ and tankers’ newbuilding activity from last week, while in the tanker segment 6 new units have been ordered. In the offshore segment, there has been a 67% rise with 30 new contracts reported worldwide from 18 last week, with Norwegian owners placing strong volume of order for platform supply vessels. The week ended with 55 fresh orders reported worldwide at a total deadweight of 1,789,700 tons, posting a 57% week-on-week increase. Amid the economic turmoil, the slump of the freight market and the distressed ship financing, the low newbuilding prices attract owners for their expansion of their fleet through the construction of new units with large sized vessel units in the main conventional vessel segments, bulk carriers and tankers, being out of their spotlight. This week’s total newbuilding business is up by 150% from similar week’s closing in 2011, when 22 fresh orders had been reported with bulk carriers grasping again the lion share, 32% of the total newbuilding business, and special projects were holding 23% of the business compared with 55% share today’s levels. In terms of invested capital, the total amount of money invested is estimated at region $1,74 billion with 35% of the total number of orders being reported at an undisclosed contract price. The offshore segment appears again the most overweight by holding 54% of this week’s total amount of money invested and containers follow with a 50% share. Notable order of this week has been the placement for a ten units’ order of 5,000 TEU boxships by Zodiac Maritime Agencies at a total contract value in the region of $450 million” mentioned the Piraues-based shipbroker.
It added that “in the bulk carrier segment, Nanjing Hengrui Shipping has ordered a 51,000dwt bulker at domestic yard Nanjing Wujiazui Shipbuilding for delivery in 2014, with option for one more unit, to be used for domestic trading. In addition, Chinese owner Jiangsu Steamship has placed an order for four ultramax bulkers of 64,000dwt in a Singapore listed Yangzijiang Shipbuilding for delivery in May, July, September and December 2014. The contract price is not revealed, but sources suggest that the owner is paying around $26-$27mil each vessel. The order is said to be Yangzijiang’s first contract for ultramax bulkers. In the tanker segment, two aframax tankers of 110,000dwt reported to have been ordered by Dalian Shipbuilding Industry of China by Seatankers Management of Cyprus at a price of region $44mil with delivery in 2014. CHEVRON Shipping of the US has added one suezmax shuttle tanker unit of 160,000 dwt at Samsung Heavy Industries from its previous order placed in summer last year for delivery in June 2014 at a cost in the region of $100 mil. In the MR size, Greek owner Pleiades Shipping has added two more units of 51,000dwt in STX Shipbuilding of South Korea for delivery in 2013-2014 from its initial order for four similar sized units last year.
In the gas tanker segment, Georgas Maritime SAS has ordered one more LPG carrier of 35,000 cu.m in Hyundai Mipo of South Korea for delivery in the beginning of 2014 at a contract price of $50mil, two units are now ordered. Furthermore, LPG player Unigas is said to be sealing an order for up to six 12,000 cbm ethylene carriers in STX Offshore & Shipbuilding of South Korea at a price believed to be below $32mil. The three partners in Unigas, Othello Shipping, Schulte and Sloman Neptune are expected to initially sign up for one vessel each with an option for a second.
Finally in the container segment, Taiwanese carrier Yang Ming Marine Transport plans to order five ultra large boxships by the end of this year. A Yang Ming spokesman stated in Lloyds List that they are planning to make purchases of five 14,000 TEU-16,000 TEU boxships by the end of this year and are now assessing details, but the time is not exactly set in stone. The order will be placed when they are sure that the market favors. Yang Ming has yet to decide how will finance the order and it plans to raise $T8bn ($267.9m) from sales of convertible bonds to build working capital that could limit its requirement to borrow. On the other hand, Evergreen’s order for 10 13,800 TEU boxship units is in doubt as owner is said to have been unable to raise financing. The order has been placed by Korea Infrastructure Investments Asset Management Co. to be chartered to Evergreen for 10 years at around $50,000/day with a purchase option on the vessels at the end of the charter. In the large panamax segment, London based Zodiac Maritime Agencies is said to have finalized a 10 boxships order of 5,000 TEU at STX Offshore & Shipbuilding Chinese facility in Dalian at the price of $40mil each for delivery in early 2014. However, market sources suggest that the contract price may be even lower in the region of $40mil each and Zodiac has penned a letter of intent for five plus five 5,000 TEU boxships. In the handy segment, Avin International of Greece has placed an order for two 1,700 units in Zhejiang Ouhua of China for delivery in 2013- 2014 at a price of $25mil each, the contract includes the option for two more units” the report concluded.