There has been a quite soft sentiment in the markets this week with bulk carriers attracting the buying appetite of investors in the secondhand market and demolition activity showing some signs of easing off. The newbuidling business has seen a slow pace of weekly growth with bulk carriers being out of the game. However, newbuilding units are still fashionable as appealing newbuilding prices  stimulate  the  interest  of  the  industry  players,  especial  in  the  container  segment.  Overall,  the  week  ended  with  24 transactions  reported in  the secondhand and  demolition market,  while  the highest activity has  been recorded  again in the newbuilding market with 20 new contracts reported worldwide.

SECONDHAND MARKET
In the secondhand market, 14 vessels reported to have changed hands this week at a total invested capital in the region of US$ 161 million, 6 transactions reported with undisclosed sale price. In terms of the reported number of transactions, the S&P activity has been marked with a 8% negative w-o-w change, while is down by 33% comparable with previous year’s weekly S&P activity when 21 vessels induced buyers’ interest with bulk carriers grasping 62% share of the total volume of S&P activity. In terms of invested capital, the most overweight sector for this week is the tanker segment grasping 51% of the total amount of money invested. In the tanker segment, more preference was been witness to modern tonnage versus vintage tonnage for bulk carriers.

NEWBUILDING MARKET
In the newbuilding market, the week closed with limited fresh activity posting a 72% week-on-week decline as only 20 units reported to have been placed, after last week’s record activity of 72 new transactions. After almost three weeks, no contracting activity has been witnessed again in the bulk carrier segment that seems comforting for the industry, taken into consideration the ongoing scheduled deliveries till the end of 2012. The total invested capital estimated to be around $4,4 bn, 4 newbuilding transactions reported with no revealed contract price, with offshore segment grasping 75% of the investment value. The floating storage booked by Shell for delivery within 2016 is the world’s largest floating gas production and storage vessel and one of the highest capital intensive investments. Thus, in terms of invested capital, the most overweight sector appears to be the offshore, while containers have won the largest share (45%) of this week’s newbuilding activity. At a similar week in 2010, the newbuilding activity was up by 55% than current levels with 31 new contracts to had been reported worldwide and bulk carriers winning 80% share of the total volume of reported contracts.
In the tanker market, the MR ordering trend continues with India’s Great Eastern Shipping placing two units of 51,000dwt in the South Korean yard “SHINAsb” at a price of $36 mil each.
In the container segment, the ordering spree for the mega containerships seems limitless with Seaspan placing a firm contract of $700 mil to build seven 10,000 TEU boxships in China’s Yangzijiang Shipbuilding. Seaspan signed letters of intent with the yard on February to build 22 identical units.
In the offshore segment, the buoyed sentiment is still there with some new fresh orders expecting in the coming days. Petrobras’ board of directors have officially sent into motion a tender for the construction of 21 drilling rigs, ultra deepwater drillships, to be built in Brazil.

DEMOLITION MARKET
In the demolition market, the keen interest for scrapping tonnage is still high with prices remaining at the same levels during the last days and bulk carriers remaining on the top of scrapping appetite. Bangladesh and India offering the highest levels by paying close to $500/ldt for dry and excess $500/ldt for wet cargo, while China is still far below the best levels offered in the Indian subcontinent region. With the monsoon period and the upcoming closure of Bangladesh on the beginning of July, there is more hope for a bounce  back  of  China  within  summer  period.  Pakistan  is  quite  inactive  during  the  last  days  as  the  result  of  its  budget announcement is being filtered by the local buyers. There has been a kind of softness in the activity, but there are still deals concluded at very appealing levels for the owners.
The week ended with 10 vessels reported to have been headed to the scrap yards of total deadweight 578,408 tons. In terms of the reported number of transactions, the demolition activity has been marked with a 44% week-on-week decline and 62% in terms of total deadweight sent for scrap. In terms of scrap rates, the highest scrap rate has been achieved this week in the tanker sector by India for a MR tanker of 43,644 dwt “OVERSEAS NEW ORLEANS” at 525/ldt and by Bangladesh for a capesize of 201,227 dwt “BRAZIL STAR” at the same price. India along with Bangladesh has attracted 80% of the total demolition activity. At a similar week in 2010, demolition activity was down by 30% than the current levels, in terms of the reported number of transactions, 7 vessels had been reported for scrap of total deadweight 123 mil tons with only two bulk carriers scrapped and India offering the highest levels $350/ldt for dry and $380/ldt for wet cargo.

GREEK PRESENCE
The Greek presence appears absent this week from the investment scene with no transactions concluded either in the secondhand or newbuilding market.