In further evidence that ship owners appear to be hesitant into placing more newbuilding orders in shipyards, the past week remained at low levels, in terms of newbuilding ordering activity, ahead of the summer holiday season, which is expected to slow things even more. According to the latest weekly report from Clarksons Hellas, "the newbuilding market has quietened this week, in stark contrast to last, with only one new order reportedly being signed. Fresh enquiry also remains somewhat limited, but this is perhaps unsurprising as we move further into the summer period, where many owners are increasingly looking forward to their vacations, thus limiting potential impetus for any new negotiations.
As mentioned there has only been the one order placed and that was by clients of Neptune Shipping in the PCTC Sector. This sector has been a relatively quiet one over the past 18 months - however this latest order, for 2 units, highlights an increasing ordering trend, with 7 vessels having been contracted in the past three months. HHI, Imabari and Hyundai Mipo, all yards with a good history of building in this sector, have been successful in taking these orders in the first half of this year. As has been the case across the various sectors, the yards have worked hard to redevelop their designs and this is now beginning to reap dividends as owners and operators increasingly begin to take note of these newer more efficient designs and the savings that can be realised from them. Across the other conventional sectors, there does remain some enquiry, albeit relatively limited and as has been the story of the year so far, will likely continue to be driven by owners looking at the yards and their newer more efficient designs. Within Japan, Korea and China competition looks to remain fierce between the yards, as they compete for this limited demand and it will be interesting to see how the yards look to differentiate themselves from each other as they work to bring in new business" concluded Clarksons Hellas.
Meanwhile, in a separate report on the past week, Piraeus-based shipbroker Golden Destiny noted that the week closed with 42 transactions in total reported worldwide in the secondhand and demolition market, up by 17% week on week with a 42% increase of newbuilding activity and 43% decline in the scrapping volume. At similar week in 2011, the total S&P and demolition activity was around 17% lower levels, when 36 transactions had been reported.
It mentioned that "in the newbuilding market, there has been a 42% increase in the volume of new contracts from last week’s activity; however the market remains in low levels. The most active segments were the bulkcarrier and the special projects representing around 41% each. Overall the week ended with 17 fresh orders reported worldwide at a total deadweight of 945,100 tons, with the size in terms of deadweight of some orders remains undisclosed. This week’s total newbuilding business is down by 64% from similar week’s closing in 2011, when 47 fresh orders had been reported with bulk carriers and containers grasping the lion share. In terms of invested capital, the total amount of money invested is estimated at region $620 mil with 47% of the total number of orders being reported at an undisclosed contract price" stated Golden Destiny.
In terms of the demolition market, the shipbroker's report said that "the scrapping activity remains at low levels with India to be facing challenging days due to the issue of safety which will affect the future of the activity. In total the week ended with just 8 vessels reported for demolition, 43% lower than last week, while in terms of deadweight the figure this week is 15.6% more, due to the bigger size of vessels headed the scrapyards. All demolition players appeared active while the prices reported are in the range from $ 325-around 400/ldt" said the report.
Hellenic ship owners were only interested in the newbuilding segment this week. It's worth noting that 47% of the reported orders of the week, were contracted from Hellas-based or Hellenic-owned shipping company. A total of eight orders were placed, six of which were for Capesize vessels, one for Kamsarmax and two in the car carrying sector for vessels with carrying capacity of 3,500 cars.