S & P

In the modern Capesize market a fresh benchmark has emerged this week with the reported sale by Japanese owners of M/V ORIENT VEGA (181,433 dwt 2011 blt Imabari) to Greek interest at US$ 36.7m.

In the Panamax sector, the last week’s sale of M/V BRAVE WIND (71,333 dwt 1997 blt Namura) which was reported committed to German buyers for US$ 10.4m, It has now come to light that this sale failed and that the vessel is now sold to Chinese buyers at lower levels in the region of US$ 9.2m.

The other Panamax sale is that of the M/V CSK UNITY (68,519 dwt 1995 blt Sasebo HI) at US$ 7.2m to undisclosed buyers, although worth noting drydocking is due in November this year.

In the Handymaxes, NYK Global have sold M/V GLOBAL SANTOSH (45,572 dwt 1997 blt Tsuneishi Zosen) to Hong Kong based buyers at US$ 8.6m with SS and DD due, while the 12 years older Empremar’s M/V SAL DE AMERICA (42,129 dwt 1985 blt Koyo) is sold to Italian buyers for US$ 3.2m; a price reflecting a scrap value at region US$ 380/ldt.

In the Tanker S+P market we can report the sale of VLCC TITAN VENUS (298,306 dwt 1995 blt Daewoo) at US$ 25m to undisclosed buyers.

The Fal Bunkering Aframax M/T KHORFAKKAN (105,304 dwt 2010 blt Sumitomo) which has been detained in Singapore since early July at the behest of mortgagees, understand has now been sold to Greek buyers for US$ 33m.

The 15 years old Aframax M/T TAIYOH III (95,666 dwt 1997 blt Imabari) has been acquired by Middle East based buyers at US$ 8.5m basis ss/dd due.

In the products sector, Formosa Plastics have sold the methanol carrier M/T FORMOSA SEVEN (35,657 dwt 1996 blt Shin Kurushima) for a firm price of US$ 9.35m. The level is slightly higher than most would have expected but being a zinc/epoxy coated Vessel the Chinese buyers may have had some very specific business in mind.

NEWBUILDING

Whilst the World's shipbuilders converged in Hamburg last week for SMM 2012, with seemingly busy diaries, we are unfortunately yet to see too much fresh interest emerge from this and new enquiry continues to remain somewhat subdued. Despite this, the week has still seen some reports of new orders being placed, although these in the slightly more niche sectors such as the Car Carrier, Shuttle Tanker and Gas markets, which continue to offer the shipyards support.

The overall market conditions continue to remain a challenge for the shipyards. Over the next 6 months, we continue to expect to see a consolidation of shipyard capacity (within China in particular), as a number of yards look to scale back their production and in doing so try to limit their exposure to lower priced contracts.

That being said, the number of contracts placed YTD stands at only 60% of last year’s equivalent (725 vessels in 2012 to date, compared to 1156 contracted Jan‐Sep 2011) and because of this there remains a large amount of production capacity still available from the yards in 2014. As witnessed throughout the year, competition amongst the yards will continue to remain fierce within the conventional sectors. Levels of demand in the market continue to remain limited and are being caused by the tight fiscal circumstances that many owners find themselves forced to operate in. This situation remains unlikely to change in the short term and therefore do expect competitively priced opportunities, including for the very latest economical designs, will become increasingly prevalent amongst the yards as they look to fill their outstanding production slots.

In terms of reported business; In Tankers, clients of AET Tanker Holdings are reported to have placed an order for a pair of 120,000dwt DP2 Shuttle Tankers at an un‐named Korean Shipyard. The yards,

which we understand to be Samsung Heavy Industries will deliver the vessels from within 2014. Pricing has not been disclosed.

In Gas, Hudong are reported to have won the order from China Shipping LNG for 4 x 174,000cbm LNG carriers. The vessels are expected to deliver from 2015 and through to 2017 but again no specific pricing has been mentioned, for this domestic order. The deal is understood to have options for a further 2 units attached.

Finally , Hyundai Mipo are reported to have won an order for one additional 6,600 CEU PCC from their existing client Ray Shipping. This will bring the total number of these units on order at the yard to 6 vessels and this latest unit will also deliver in 2014.