The secondhand ship purchasing activity keeps its pace even though we are in the heart of the summer, with purchase interest for vintage units being hot in the bulk carrier segment. The newbuilding business continue to show signs of softness in the bulk carrier and tanker segment, but it still outpaces the strength of the secondhand buying momentum. In the demolition market, the sentiment is positive with steel prices promising high levels offered for the disposal of older units. It seems that this is the time owners to reconsider their disposal of older units and proceed with secondhand ship purchasing investments now that the asset prices are very alluring for the prospective investors.
Overall, the newbuilding business is up by 60% in comparison with the buying momentum in the secondhand market, while the demolition activity keeps its pace. The week closed with 34 transactions reported worldwide in the secondhand and demolition market, posting a 26% decline from a similar week in 2010 when 46 transactions had been reported and secondhand ship purchasing activity was standing 13% higher than the ordering business. The highest activity for one week more has been recorded in the newbuilding market with 56 fresh orders reported worldwide.

SECONDHAND MARKET
In the secondhand market, 22 vessels reported to have changed hands this week at a total invested capital in the region of US$243 million, 8 transactions reported with undisclosed sale price. In terms of the reported number of transactions, the S&P activity is up by 47% from last week’s activity and down by 35% comparable with previous year’s weekly S&P activity when 34 vessels induced buyers’ interest with bulkers and tankers grasping 38% and 32.5% share of the total volume of S&P activity. In terms of invested capital, tankers and gas tankers seem to have attracted more than 40% of the total invested capital due to firm activity witnessed for gas carriers with Oslo listed buyers concluding a swap transaction of four medium size units with very large gas carriers. Notable deal of the week appears to be in the bulk carrier segment for a kamsarmax resale of 82,100dwt built 2011 Tsuneishi Fukuyama for $39 mil to Greek buyers. In the gas tanker segment, firm activity has been witnessed with Oslo listed buyers concluding a swap transaction of four medium size units with very large gas carriers.

NEWBUILDING MARKET
In the newbuilding market, more business came to light this week with activity in all main segments, bulk carriers, tankers and containers, against fears of late recovery in the shipping environment. Market players seem that they seek for more newbuilding investments so as to explore the bottom lows of the prices that yards are offering, while Japan is slipping behind due to price competitiveness from yen appreciation against dollar. However, some hidden business has been revealed this week with robust activity in the tanker segment for small product carriers and liners. The notable deal of this week was revealed in the bulk carrier segment with the ordering of two Very Large Ore Carrier units of 405,000dwt by BW Group (Berge Bulk) of Norway in Bohai Shipyard for delivery in 2014. The units will be long term chartered to Vale Brazil and the order leaves questions about the investments strategies of shipping conglomerates as they seem that dismiss fears of oversupply in the capesize segment. Overall, the week closed with 56 new orders reported worldwide, up by 87% from a similar week in 2010 when 30 contracts had been reported with bulk carriers grasping 50% of the activity. In terms of invested capital, the passenger / cruise sector appears this week the most overweight segment due to the investment decision of Carnival for placing three newbuilding units at a total cost of close to $2,15 billion. The offshore segment has experienced no activity the last days, while it used to be the most heavily invested segment in previous weeks.
In the bulk carrier segment, Greek owner Capital Product Partners, a division of parent Capital Maritime & Trading, entered the bulk carrier sector for the first time by ordering one kamsarmax unit in Sainty Shipyard of China for delivery in 2014. Moreover, Cardiff Marine of Greece has added two more 176,000dwt units at Shanghai Waigaoqiao for delivery in 2014.
In the tanker segment, the majority of the business came from the Japanese yards by domestic owners, while one MR unit has been placed in Korean Hyundai Mipo for delivery in 2013.
In the container market, following the ordering plethora of post panamax units this week new deals emerged in the handy sector. German owner Hermann Buss has placed an order for four 1,705 units in Chinese yard Guangzhou Wenchong, which has a long history of building tonnage for German owners, for delivery in 2012 and 2013 at an undisclosed contract price. More fresh business has also been revealed in the handy sector by Sinotrans of China and Pan Continental Shippping of South Korea. In total, 8 orders is estimated to have been placed for container units in the handy sector this week, but this does not imply that the mega containerships’ ordering trend has been faded out.
In the passenger / cruise sector, Carnival has ordered three newbuildings for its European brands Aida and Costa Cruises for a total of nearly EUR 1,5 billion ($2,12 bn). The US Corporation has agreed to a memorandum of understanding with Japan’s Mitsubishi HI for building two 125,000gt ships of 3,250 passenger capacity for Germany’s Aida Cruises with delivery in March 2015/2016 at a cost around EUR 455mil each. The MoU is subject to closing conditions, including execution of shipbuilding contracts and financing. Another 132,500gt vessel of 3,700 passenger capacity was ordered at Italy’s Fincantieri for delivery to Costa within October 2014 at a total cost of EUR 555 mil. According to Carnival, all three ships will be the largest ever built for the Aida and Costa brands.

DEMOLITION MARKET
In the demolition market, the Bangladesh is still closed until the extension order is officially revaluated and signed by the Supreme Court on August 7th. In the meantime, players of the industry are nervous with many cash buyers feeling ambitious for the official opening of the beaches till mid-August. India continues to take the large appetite of scrapping tonnage by offering prices excess $500/ldt, while some vessels are also heading to the scrap yards in China at levels offered excess $450/ldt. In Pakistan, prices are still low comparing to the best levels offered by Indian scrap buyers, but there has been some increased demand and with the month of Ramadan being ahead we may see some improvement in rates and more vessels coming in the shore.
The week ended with 12 vessels reported to have been headed to the scrap yards of total deadweight 717,968 tons. In terms of the reported number of transactions, the demolition activity has been marked with no change from previous week’s activity, while there has been a 29% increase of the total deadweight sent for scrap due to large size units sent for scrap in the bulk carriers and tanker segment. Bulk carriers are still holding the lion’s share, 42% of this week’s total demolition activity. In terms of scrap rates, the highest scrap rate has been achieved this week in the tanker carrier sector by India for an aframax unit of 84,040 dwt “BEL TAYLOR” of 14,830 LDT at $575/ldt incl 900 tons of IFO remaining on board. India has attracted 67% of the total demolition activity offering $525/ldt for dry/general cargo and $550/ldt for wet cargo, the highest levels seen from the 2008 fall. At a similar week in 2010, demolition activity was standing at similar currently levels, in terms of the reported number of transactions, 12 vessels had been reported for scrap of total deadweight 536 mil tons with only three bulk carriers scrapped and India with Pakistan offering the $410/ldt for dry and $440/ldt for wet cargo.

GREEK PRESENCE
Greek owners make this week their presence strong in the bulk carriers’ ordering business with one unit reported in the kamsarmax segment by Capital Products Partners and two capesize units by Cardiff Marine at an undisclosed contract price. In the tanker segment, Greek owner Samos Steamship has placed an order for one MR unit of 51,000dwt in Hyundai Mipo of Korea for delivery in 2013 at an undisclosed contract price. In the secondhand market, one kamsarmax resale of 82,100 dwt built 2011 Tsuneishi Fukuyama reported resold to Greek buyers.