With the annual Summer shipyard holidays in Korea now approaching, we anticipate that the coming two weeks will remain a little subdued Clarksons said in a recent weekly report. The leading researcher and shipbroker also mentioned that “the newbuilding story of the year has been dominated by high value business - with LNG, Container and Offshore sectors leading the charge. Competition across these sectors has been fierce and with a much narrower pool of yards competing for the same business, buyers prepared to invest into high value assets, have been to realise competitive pricing, as a result of the competitive dynamic that exists between the yards.
This week we saw HHI announce a 10% drop in their operating profit against an increased year on year sales performance - Samsung also announced $14.2bn of orders year to date - but again a much reduced level of profitability. So whilst there is no doubt that the shipyards in Korea have been successful in terms of maintaining productivity and certainly winning some high value and profile business - this has not been as profitable an endeavour as the market might assume. This will certainly impact on how the pricing story will evolve in the 3rd and 4th quarters of the year - and whilst there will certainly be an interest from Seller's to continue to drive momentum into the market - this will be against a continued pressure to improve margin - and as to whether Buyers will be accommodate such a potential firming of values - this remains to be seen!” concluded Clarksons.
On a similar note, the Piraeus-based shipbroker Golden Destiny said that investments continued in a slower pace in the newbuilding market, presenting a 47% decline from last week in terms of contracted orders. “Overall, the week closed with 25 new orders reported worldwide, down by 71% from similar week closing in 2010 when an impressive figure of 86 new orders had reported worldwide. Bulkcarriers and containers are again in the top preference of investors, representing 32% each of the total orders reported. The total investment capital is calculated to be more than usd $ 965.5mil, however the actual figure remains undisclosed since for 13 of these orders, no price related detailed were disclosed.
In the bulkcarrier segment, it appears that despite the already reported orders of 8 units, Japanese investors rumored to be proceeding with speculative orders al local Japanese yards for standard bulkcarrier designs. In total, a number of 20 orders have been recorded to various Japanese yards i.e. Koyo, Imabari, I-S Shipyard and Shin Kasado Shipyard. This move seems to be giving a boost to the Japanese production, while according to our sources these units might be probably sold at a later stage or will be bareboated out by trading houses with purchase options” said the shipbroker.
It also mentioned that “in the container segment, activity remains vivid with Greek investors continuing to show their belief in the sector by investing in the post & small panamax sector, while the state owned company of India, Shipping Corporation of India contracted a 3,500teu unit at China’s Rongsheng Shenfei. In the gas segment, Golar LNG and Ceres LNG (though Gaslog) continued their ordering spree by adding more units in their fleet. Lastly, the investments in the special projects, continue on a weekly basis. This week one Drillship and one Jack up Drilling Rig have been reported” concluded Golden Destiny.
In terms of the presence from Hellenic ship owners the shipbroker said that the week ended with the nine transactions in total concerning greek investments. In the secondhand market, just one sale of a 5000teu container vessel built 2003 and acquired at $ 55 mil concerned greek investments, while in the newbuilding market eight greeks appeared to have invested in new contracts. More specifically, in the newbuilding market, Thenamaris is again in the spotlight with ordering 4 x 5023 container units from Hyundai Samho, while in the same shipyard Aeolos Management has placed an order for three 6,700 teu. In the gas tanker sector Ceres ordered one more LNG carrier of 155,000cum having on order now six such units. The total invested capital for the secondhand market is usd $ 55 mil, while for the newbuilding investments taking into consideration that the contract prices of the orders of Aeolos remains unknown, a total capital of $ 440mil has been calculated” said the report.