The secondhand ship purchasing activity has maintained its pace with some signs of softness this week as we are in the low summer period and economic conditions are not favorable for investment decisions. The dry market has shown instability with the BDI trend being negative and capesize earnings flirting with the low levels of the end 2008 / early 2009. However, the newbuilding business has not been refrained leaving questions about the outlook of the freight markets, since the world economy seems to have been entered in a reverse mode heading probably to one more recession, hoping not of the same magnitude of the 2008 financial crisis.
Overall, the newbuilding business is up by 93% in comparison with the buying momentum in the secondhand market, while the demolition activity is at similar levels with the volume of S&P activity. The week closed with 26. transactions reported worldwide in the secondhand and demolition market, posting a 44% decline from a similar week in 2010 when 18 transactions had been reported and secondhand ship purchasing activity was standing 87% lower than the ordering business. The highest activity for one week more has been recorded in the newbuilding market with 29 fresh orders reported worldwide.

SECONDHAND MARKET
In the secondhand market, 15 vessels reported to have changed hands this week at a total invested capital in the region of US$261.6 million, 1 transaction reported with undisclosed sale price. In terms of the reported number of transactions, the S&P activity is down by 31.8% from last week’s activity and up by 114.3% comparable with previous year’s weekly S&P activity when 7 vessels induced buyers’ interest with bulkers and tankers grasping 43% and 29% share respectively of the total volume of S&P activity. In terms of invested capital, the bulkcarrier sector was the most overweight grasping 78.6% of the total invested capital.

NEWBUILDING MARKET
n the newbuilding market, the activity has been eased from last week’s levels, down by 48%, due to reduced ordering business in the bulk carrier and tanker segment by 79% and 57% respectively. Containers have monopolized investors’ ordering interest with a 75% week-on-week rise in business. Overall, the week closed with 29 new orders reported worldwide, down by 44% from a similar week in 2010 when 52 new contracts had been reported with bulk carriers grasping 58% and tankers 23% of the total activity. In terms of invested capital, more than $1,9 billion of dollars have been invested this weeks, 9 transactions reported at an undisclosed contract price, with containers and special projects attracting 87% of the total investment due to hefty investments for post panamax container units and jack up drilling rigs.
In the bulk carrier segment, an order has been revealed in the kamsarmax segment by Taipei-based industrial conglomerate Formosa Plastics Group for two 82,000 dwt units to built in state-owned Qingdao Beihai Shipbuilding at a cost of between $33,5 and $34,5 mil each scheduled to be delivered in the second half of 2013.
In the tanker segment, intense activity has been revealed in the MR chemical/product segment. Ireland’s Admore Shipping has exercised options for two 50,000 dwt units in Korea’s SPP Plant Shipbuilding yard in 2013, the original order had been placed in 2010. Greek owner Chios Navigation has also placed an order for two 52,000 dwt units in Hyundai Mipo Dockyard with delivery in the first half of 2013. Furthermore, Socatra owner of France, following a recent order in July for two 37,000 dwt units in Hyundai Mipo, has now expanded its investment by placing further two high specification 50,000 dwt product carriers in SPP Shipbuidling at a price of $40 mil each with delivery in September and November 2013.
In the gas tanker segment, the LNG business continues promising with sources revealing that big three yards cannot now offer 2014 delivery slots for gas tonnage. Following Cardiff Marine’s firm order for four LNG of 159,800 cbm units in Daewoo, Stena Bulk has now placed two 174,000 cbm units in the same yard for delivery in 2014 with option for two more.
In the container market, more activity came to light this week in the post panamax segment amid slowing growth in the U.S. and European economies. South Korea’s Hyundai Merchant Marine announced that it has placed an order for five 13,100 TEU units in Daewoo Shipbuilding and Marine Engineering at a total cost of around $643 mil. The units will be the largest that a South Korean liner has been ordered and they will be also among the largest for the New World Alliance. Hyundai Merchant Marine has said that by enlarging ship types it will be able to cut costs and strengthen competiveness. Moreover, Seaspan is said to have signed contracts  to  build  three  10,000  TEU  units  at  Chinese  yards  for  delivery in  2014,  with  an  option  to  build  18  more  similar newbuildings. The vessels will be chartered under 10-year fixed rate time charters with South Korea’s Hanjin Shipping. In the small panamax segment, Hamburg based owner Carsten Rehder has inked a deal worth up to $200mil for up to wide beam containerships of 3,800 TEU to be chartered to German liner operator Hamburg Sud. The order has been placed in China’s Taizhou Catic Shipbuilding & Heavy Industries with financing coming from private equity sources and with option for two more units for delivery in first quarter of 2013. Furthermore, Greek Shipowner Evangelos Marinakis has declared an option for one further small post-Panamax box ship of 5,000 TEU, which was attached to an order placed in April. In the large panamax segment, China Rongsheng Heavy Industries is said to have won an order for two 6,600 TEU units by an Undisclosed European owner, but delivery dates and order price has not been disclosed.
In the container handy segment, Chinese logistics Sinotrans is said to have booked a pair of 1,800 TEU boxships to be built in Qingshan Shipyard at a total cost of $49,4 mil for delivery in October and November next year. The vessels will enter the fleet of its coastal-feeder subsidiary Sunny Express in an attempt to capitalize China’s domestic trade. According to a company’s release given the continuing growth of Chinese domestic market demand and with ship prices at historical low point, the decision to built their own high tonnage containerships is in line with the development of domestic logistic services and the business strategy of the company and Sinotrans Sunny Express.
In the offshore segment, fresh activity has been revealed for jack up drilling rigs, where demand for newbuilding business keeps its pace. Shanghai Waiqaoqiao Shipbuilding will construct two harsh ervironmental high specification jack up drilling rigs for Protector Offshore Drilling of Norway at a price of $209 mil each with delivery in 2014 and 2015, an option has been attached for three more units. In addition, Noble Corporation of USA has exercised an option for two jackup rigs in Jurong Shipyard at a price of $222 mil each with delivery in 2013, option for two more units has been attached.

DEMOLITION MARKET
In the demolition market, the Bangladesh’s Supreme Court upheld the decision of the High Court, after an appeal by green campaigners to overturn the decision, granting Chittagong shipbreakers an extension to continue importing ships for scrapping till early October. The ruling gives Bangladeshi breakers additional time to implement tougher and environmental safety rules. After witnessing high rocketing scrap rates offered by India last week, it remains to be seen if this high momentum will persist as many end buyers seem to wait and watch the direction of the market before committing to new high priced units. India remains on the frontline in terms of scrap prices offered and volume of transactions, while levels in China have shown some improvement, especially in the wet market, to bridge the gap with the India subcontinent region. In Pakistan, business is still slow, but there are expectations for more aggressive buying as the month of Ramadan approaches.
The week ended with 11 vessels reported to have been headed to the scrap yards of total deadweight 672,538 tons. In terms of the reported number of transactions, the demolition activity has been marked with almost no change from previous week’s activity, while there has been a 6.44% decrease of the total deadweight sent for scrap.  This week although a similar amount of tankers and bulkcarriers have been headed to the scrapyards, the difference in deadweight stands at 224.395 tons since larger size tanker units have been reported. 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 95,029 dwt “SCOTIA SPIRIT” of 16,8450 LDT at $540/ldt. India has attracted 54.5% of the total demolition activity offering $520/ldt for dry/general cargo and $545/ldt for wet cargo, a small revise downwards for the high levels of the previous week. At a similar week in 2010, demolition activity was standing at same levels, in terms of the reported number of transactions, 11 vessels had been reported for scrap of total deadweight 628,101 tons with only three bulk carriers scrapped and tankers holding 73% of the total activity. Pakistan was active by offering the best levels among rivals, $400/ldt for dry/general cargo and $445/ldt for wet cargo.

GREEK PRESENCE
This week, Greek presence was quiet with one transaction in the secondhand market through the acquisition of an VLCC of 2000 at $ 36 mil and with 4 orders in the newbuilding market, 2 in the MR tanker sector and two in the small panamax container sector. The total invested capital is calculated to be in the region of 36mil for the secondhand market and remains undisclosed for the newbuilding orders since the details of the two MR vessel contracted by Chios Navigation hasn’t been disclosed.