The oversupply of vessels, especially in the dry bulk segment, together with financing limitations has diminished newbuilding ordering activity since the start of the year. As a result, Clarksons Hellas pointed out in its latest weekly report that "so far in 2012 we have seen the total orderbook decline by 19 percent in terms of dwt compared to the size of the orderbook at the end of 2011, notably the dry bulk sector still accounts for 56.6% of the total number of ships on order. This is therefore perhaps an unsurprising statistic, given that the Baltic Dry Index has been under so much pressure for most of 2012, dropping 46% Q-o-Q during the first quarter and in spite of a slight gain during the second quarter, year-on-year the BDI is still down by 31%. Add to this an orderbook overhang from the boom period, a world economic slowdown and a softening in commodity demand and it is no surprise that freight rates have struggled to gain any ground to date. Although we have seen a record number of drybulk ships scrapped, the average size of older ships is smaller than new deliveries and the net growth in the fleet far outweighs the demand for deadweight and therefore the pressure on freight rates continues" said Clarksons Hellas.
It added that "in the first half of 2012 earnings in the crude sector have in part been supported by rising OPEC production (returning to levels not seen since 2008), record imports into China and India and increased long-haul trade both from the Arabian Gulf to the United States and from the Atlantic Basin to Asia. However, heavy deliveries from the boom years still continue to weigh on the market in 2012 and probably into 2013, although we are expecting to see some positive signs that we will start to see some deceleration in fleet growth going into 2013. The difficulty yards face for the remainder of the year, is that the price to earnings ratio has increased to historically high multiples and therefore Yards will need to continue to find ways to further incentivise Owners to order in the 2nd half of 2012, whether that is through pushing new eco designs, financing or further finding ways to cut pricing remains to be seen" the report concluded.
In a separate weekly report, shipbroker Golden Destiny noted that the offshore segment has kept on its role as the "locomotive" of the newbuilding ordering activity. The report noted that "South Korean yards are still winning high valued ordering activity leaving behind Chinese and Japanese counterparts, while in the bulk carrier segment the eco friendly design has been very popular for construction giving a boost of ordering in the struggling shipyards". In total the week ended with 36 fresh orders reported worldwide at a total deadweight of 442,700 tons, posting a 35% week-on-week decline with a 300% increase on LNG ordering activity and 43% lower volume of offshore newbuilding contracts. The report adds that "special project vessels are holding for one more week the lion share, 47%, of the total newbuilding activity, while dry bulk carriers follow with a 19% share. In terms of invested capital, the total amount of money invested is estimated at region $1,8 billion with 66% of the total number of orders being reported at an undisclosed contract price. The offshore segment is the most overweight by holding 50% of this week’s total amount of money invested due to the high valued order of $650mil for an ultra deepwater drillship from US owner Ensco" said Golden Destiny.
It also mentioned that "in the bulk carrier segment, Oldendorff group is quietly planning an initial public offering to build 16 or even 28 newcastlemax units at Shanghai Waigaoqiao Shipbuilding of China at a total price of over $1,3billion if all 12 options are exercised. In addition, Japan’s Mitsui OSK Lines is planning to order the first of a new generation super efficient 200,000dwt ore carrier with domestic shipyards as a new design the so called “Handy Ore Carrier” (HOC). The HOC would focus on “3S”: Shallow Draft, Swift Unloading and Save Energy. Unlike very large ore carriers of 300,000-400,000dwt, the HOC with a draft below 17meters intends to call at shallow water harbors worldwide. MOL officials indicate that the order could be for up to 10 ships despite the distressed freight market status and the added technical characteristics could lift the newbuilding price at excess of $47mil.
In the kamsarmax segment, Chartworld Shipping of Greece is said to have inked a letter of intent with Cosco Dalian Shipyard of China for two bulkers of 82,500dwt scheduled for delivery in March 2014, with option for two more sister vessels to follow. In the supramax segment, Swiss Marine of Greece is said to have increased the size for a pair of 57,000dwt units ordered in Jinling of China to 64,000dwt for delivery in 2014. The deal has been placed late last year, but it never reported and the vessels is said to cost around $25-$26mil each. In the handymax segment, Shanghai Yinhua Shipping, a subsidiary of China Shipping Development Company, has added a 47,500 dwt vessel at China Shipping Industrial Jiangsu, wholly owned by China Shipping Development Company, at a cost of $28,7mil for delivery by September 2013. Hong listed CSDC said: “In view of reasonable cost of constructing the bulk vessel, the directors are of the view that the construction and ownership of the bulk vessel is low risk, efficient and will increase the competitiveness of the group in the shipping market.”
In the handysize segment, Chinese shipbuilder Guangzhou Wenchong has announced it latest order for four eco 28,000 dwt units from US owner Seaboard Marine designed to burn low-sulphur fuel so they can enter emission controlled waters in Europe and the US. Main particulars of this vessel type are length 175m, a beam of 27m and draft of 8m. The vessels are stemmed for delivery in 2014/2015. In addition, German dry bulk owner, Oldendorff Carriers, has ordered two 35,000 dwt eco bulkers at South Korean run Samjin Shipbuilding Industry for delivery in October and December 2013, with an option of two more for delivery in 2014. Oldendorff Carriers stated that ships will have a 35-ton cranes, strong tanktops, a water ballast treatment system and be fully fitted for logs.
In the container segment, Shanghai Jinjiang has ordered four feeder box ships of 1,100TEU in JIANGNAN Shipyard of China for delivery in 2014. The vessels will be used for Chinese coastal cabotage and Shanghai Jinjiang has also arranged options for further ships as part of the deal. Last week’s reported order by UK’s Zodiac Maritime Agencies for five 5,000TEU large panamax boxships, with an option for five more, for construction at Hanjin Subic Bay is now said to have been ordered at STX’s Dalian yard for delivery by the third quarter of 2014 at a value of $45M each.
In the tanker segment, serious doubts exist for the delivery of 12 very large crude carrier newbuildings from Chinese shipyards ordered by Iranian tanker owner NITC amid ongoing European Union sanctions against the Middle Eastern state. NITC officials said that they are not going to take immediate delivery of the vessels due to poor market conditions causing serious issues in Chinese shipyards. Six 318,000dwt vessels were ordered at Dalian Shipbuilding Industry and further six at Shanghai Waigaoqiao Shipbuilding in August 2009" Golden Destiny concluded.