The secondhand ship purchasing activity seems to keep its pace in the bulk carrier segment with dry units of all sizes being on the spotlight, while investors are still skeptical in the purchase of secondhand boxships as it seems that there is a wide gap between sellers’ price expectations and buyers’ ideas. In the tanker segment, for one week more the purchase interest has been weak as the freight markets are still trading at or below breakeven levels and the outlooks seems not so much bullish till the end of the year, especially in the crude market. In the newbuilding market, the excessive containership newbuilding business persists with fears for an overhang of tonnage as major liner operators are still targeting at mega containerships due to economies of scale and evolution of technology. Overall, the newbuilding business seems to outpace again this week’s growth in the purchase of secondhand units, standing at 154% higher with bulk carriers appearing more popular as newbuilding investments rather than secondhand units against warnings for a huge amount of vessels’ deliveries in the future.
Overall, the week ended with 24 transactions reported in the secondhand and demolition market, posting a 20% increase from a similar week in 2010 when 20 transactions had been reported, while the highest activity has been recorded in the newbuilding market with 33 fresh orders reported worldwide.

SECONDHAND MARKET
In the secondhand market, 13 vessels reported to have changed hands this week at a total invested capital in the region of US$144 million, 1 transaction reported with undisclosed sale price. In terms of the reported number of transactions, the S&P activity is down by 19% last week’s activity and down by 28% comparable with previous year’s weekly S&P activity when 18 vessels induced buyers’ interest with bulk carriers grasping 56% share of the total volume of S&P activity. In terms of invested capital, bulk carriers have attracted almost 45% of the total invested capital with vintage units of more than 16yrs old being on the focus, while in the tanker segment the purchase of an aframax tanker of 105,905dwt built 2008 at an action for a price region $42,5 mil won also a large share of this week’s total invested capital.

NEWBUILDING MARKET
In the newbuilding market, the ordering business continues hot from last week levels with Chinese yard “Jiangsu Rongsheng” grasping the world interest as it bagged a massive order for up to 10 large bulkers  of 205,000 dwt and four large containerships of 6,600 TEU by European owners that proved to be Greek players. The ordering activity in the bulk carrier segments has kept last week’s robust pace of growth with 19 reported, acquiring 58% share of this week’s total volume of newbuilding business. Overall, the week closed with 33 new orders reported worldwide, down by 39% from previous week’s activity and up by 23% from similar week closing in 2010 when 43 new orders had reported worldwide with bulk carriers and containers grasping 68% of newbuilding business. In terms of invested capital, the offshore segment appears the most overweight segment due to the hefty investment of Maersk Drilling for the construction of two ultra deepwater units at a total cost of $1,3 bn.
In the bulk carrier segment, noteworthy deal is the order for ten 206,000dwt bulk carriers placed in Jiangsu Rongsheng by a Chinese utility group and Greek shipowner Restis at an estimated cost of $53,5 mil for delivery in 2013/2014. Rongsheng orders of such size were rare for Chinese shipbuilders in the first half of 2011.
In the tanker segment, Samsung Heavy Industries of South Korea has won a newbuilding contract by Teekay Offshore for a shuttle DP2 suezmax tanker quartet for delivery in mid / late 2013. A Samsung spokesman confirms the deal and says the contract is a new order rather than an existing penned long time ago, but further details regarding price or payment terms have not been revealed due to a confidentiality clause of the contract. The company has secured 10year charter agreements for the units and has confirmed that deal includes extension and purchase options. Furthermore, Dubai based Gulf Navigation is said to have signed up for two more units of 320,000dwt, as an exercised option, bringing its total order to four units. The company has chartered its units to Grand China Logistics for 10 years at a rate of $36,000 to $37,000/day, including a profit sharing scheme.
In the container market, tanker and LNG carrier Greek owner George Prokopiou has confirmed that this group has placed its fist containership newbuilding order amid a surge of investment in Seatraders, the dry arm of its shipping business. The order is for two 6,600 TEU placed in Jiangsu Rongsheng at an estimated cost of $68 mil each for delivery end 2013 and early 2014. A similar order for two 6,600 TEU was placed also by Greek owner Goldenport in the same yard for delivery in 2013. Furthermore, Hanjin HI has announced that it has won its first merchant ship newbuilding order in about three years. The new order, which is at letter of intent stage, has been signed by an undisclosed Asia based owner for four post panamax box ships of 4,700 TEU at an estimated cost of $62,5 mil per vessel, for delivery during 2012. In addition, Jinhai HI of China is said to be in negotiations for a series of orders up to
26 units of 1,800-1,900TEU from two European owners. The yard does not disclose the name of the European owners behind the deals with rumors suggesting that a UK group is involved in the deal. The units are said to be the yard’s fist containerships and Jinhai is aiming to build larger and more fuel-efficient boxships in the future. In the post-panamax segment, South Korean liner operator Hyundai Merchant Marine is rumored to be in talks with domestic shipbuilders for the construction of five 12,000TEU units for delivery in 2013, with an order expected to be finalized next month. Additionally, Greek shipowner Enesel is said to have placed an order for four 9,600TEU units in Hyundai Heavy Industries of South Korea at an estimated cost of less than $100 mil each for delivery during 2014 and will be long term chartered to German liner opertator Hamburg Sud.
In the offshore segment, Maersk Drilling has ordered another two ultra deepwater drillships from South Korea’s Samsung HI for delivery in the second and third quarters of 2014 at a total project cost of about $1,3 bn. The drill ships will be of similar design to the vessels Maersk Drilling ordered from Samsung in April 2011. The 228m-long drill ships will be able to operate at depths of up to 12,000ft and will be capable of drilling wells of more than 40,000ft. Maersk Drilling has also options for another two drill ships. The company’s CEO and member of the Executive Board said: “We have an ambition of becoming one of the leading drilling contractors in the ultra deepwater segment and this order is another important step in taking a bigger share of this attractive market segment. The order reflects our commitment to grow our rig fleet enabling us to serve our customers in the ultra deepwater segment on a more regular basis.” Moreover, Daewoo Shipbuilding and Marine Engineering of South Korea has won an order for two semi-submersible drilling rigs from Norway’s Songa Offshore for delivery in first and third quarter of 2014 at a cost of $565 mil.

DEMOLITION MARKET
In the demolition market, there has been a subdued sentiment with India offering weaker scrap rates and Bangladesh situation still being vague. Pakistan is trying to bid some tonnage, while China has stepped behind offering the lowest levels. In the bulk carrier segment, capesizes are still on the spotlight with about 47 units reported to have been sent to the scrap yards within the year. There is a feeling that this trend will continue till the end of the year as capesize time charter equivalent earnings have not yet fully recovered, even though are floating above $10,000/day.
The recent softness in scrap prices has caused some worries about the trend in the coming weeks and some of the buyers and sellers wait and watch before committing to new deals. Rumors that the expected market closure in Bangladesh may not be forced on the beginning of July, leaves hopes for a future spike in rates. Bangladesh is now offering $495/ldt for dry/general cargo and $520/ldt for wet cargo, while in India scrap levels have fallen by $30-$40/ldt from May. It is worth mentioning the intensive scrapping trend in the reefer segment during the last month in the scrap yards of India.
The week ended at a slow pace of demolition activity but at higher levels from previous week with 11 vessels reported to have been headed to the scrap yards of total deadweight 850,332 tons. Bulk carriers have grasped the lion share, 55% of this week’s volume of business with 67% of the scrapping business being centred on large size units, capesizes and VLOC. In terms of the reported number of transactions, the demolition activity has been marked with a 22% week-on-week increase and in terms of the total deadweight sent for scrap there has been a 71% increase. In terms of scrap rates, the highest scrap rate has been achieved this week for M/V “Berge Pacific” 231,851dwt of 33,679 ldt at $505/ldt with buyers option India – Pakistan-Bangladeh. At similar week in 2010, demolition activity in terms of the reported number of transactions was down by 81% than the current levels, when 2 vessels had been reported for scrap of total deadweight 204 mil tons with India offering the highest levels $375/ldt for dry and $400/ldt for wet cargo.

GREEK PRESENCE
Greek players appear more active than ever from the beginning of the year with a new tranche of orders placed in the bulk carrier segment by Restis Group and a Chinese uitlity for four units of 205,000 dwt, two kamsarmaxes by Dynacom and two supramaxes, as an exercised option, by Rethymnis & Kulukundis. In the container segment, four units of 6,600 TEU have been ordered by Goldenport and Dynacom in Jiangsu Rongsheng. Additionally, Greek shipowner Enesel is said to have placed an order for four 9,600TEU units in Hyundai Heavy Industries of South Korea for delivery during 2014 and will be long term chartered to German liner opertator Hamburg Sud. The total newbuilding investment by Greek owners estimated to be at region $892 mil, 4 transactions reported as an undisclosed contract price. In the secondhand market, one unit reported to have gone to Greek hands, a panamax of 75,607dwt built 2000 at region $22 mil.