The week closed with sharp falls of activity in the secondhand, newbuilding and demolition market, while it is considered to be one of the most silent weeks since the beginning of the year. Newbuilding investments are still under second thought in the traditionally bulk carrier and tanker segment on the back of ample available list of tonnage.
Overall, the newbuilding business is up by 42% 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 14 transactions reported worldwide in the secondhand and demolition market, posting a 56% decline from a similar week in 2010 when 32 transactions had been reported and secondhand ship purchasing activity was standing 21% lower than the ordering business. The highest activity has been recorded once more in the newbuilding market with 12 fresh orders reported worldwide.

SECONDHAND MARKET
The secondhand ship purchasing activity has been very limited this week in all segments. Bulk carriers continue to be the most popular purchase candidates under the current fundamentals, but it seems that buyers wait to see the new direction in asset prices before reverting to their purchase plans. In the tanker market, the S&P activity is limited with asset prices showing further correction downwards, mainly in the crude market, following the last week’s VLCC sale of 281,050dwt built 2000 Japan at $36 mil. However, it is too early to say if this will be the new price benchmark unless other transactions will follow. In the container market, the newbuilding business is still robust with investors appearing eager to place newbuildings box units in Chinese and Korean yards at the low appealing newbuilding prices rather than buying secondhand modern and smaller units.
Overall, 7 vessels reported to have changed hands this week at a total invested capital in the region of US$ 294.1 million. In terms of the reported number of transactions, the S&P activity is down by 53% from last week’s activity, mainly due to a sharp fall in the bulk carrier segment with only 2 vessels reported to have changed hands and down by 63% comparable with previous year’s weekly S&P activity when 19 vessels induced buyers’ interest with tankers being the protagonists grasping 63% share of the total volume of S&P activity. In terms of invested capital, the container segment seems to be the most overweight due to a post panamax container resale of 13,000 TEU built 2012 South Korea for region $156mil, including 2years time charter.

NEWBUILDING MARKET
In the newbuilding market, there has been a significant drop in business this week as only 12 fresh orders reported worldwide at a total deadweight of 1,343,000 tons, posting a 59% week-on-week decline with interest in the container segment being still intense. Notable order of this week has been in the tanker segment by Canada’s Teekay Offshore for four DP2 154,000dwt shuttle tankers in Samsung H.I. of South Korea for delivery between April and November 2013 to service a long term contract with BG Group of the UK and by Chevron Shipping for one shuttle unit of the same deadweight placed also in Samsung for delivery April 2013. Overall, this week the ordering activity is down by 50% from similar week closing in 2010 when 24 new orders had been reported worldwide. In the bulk carrier segment, we have witnessed only a contract placed for three units of 206,000dwt placed in Chinese yard by a Greek owner, when at similar period in 2010 bulk carriers were holding 58% of the total newbuilding business. In terms of invested capital, the gas tanker segment with the offshore appear the most overweight, but it is difficult to estimate once more the total invested capital as 67% of the ordering transactions had been reported at an undisclosed contract price.
In the tanker segment, except for the shuttle tanker’s ordering activity witnessed by Teekay and Chevron, an order has been also revealed for two small units of 6,600dwt of river/sea design placed by Russian Moscow River Company in domestic yard for delivery in 2012.
In the gas tanker segment, Greek owner Dynagas has inked a contract for two LNG units of 155,000 cum in Hyundai Heavy Industries for delivery in 2014 at $200mil each. The order comes as an extension of a similar order placed in May exercising an option of one more unit and adding also a fourth vessel in the contract. Furthermore, a Taiwanese oil tanker group Global Energy Maritime Corp. is said to be working to close a huge order for six 320,000 dwt VLCC units and a chemical tanker.
In the container segment, an undisclosed European owner has placed an order for two units of 6,600 TEU in Jiangsu Rongsheng, with option for two more, at a cost of $69 mil each with delivery in 2013.
In the offshore segment, Transocean Offshore of U.S.A exercised an option for a third KFELS Super B drilling rig from Keppel Fels yard with delivery in September 2013 at a cost of $380 mil.

DEMOLITION MARKET
In the demolition market, the extension of the Bangladesh’s market operation has not influenced yet the shipbreaking activity in terms of volume of transactions and scrap prices, with India showing signs of softness as the levels have started to fall below $500/ldt after the high levels seen before few days. The Ramadan month in Pakistan and Bangladesh is underway and the activity is still subdued by the scrap buyers who may wait to see further falls in scrap prices. In the meantime, Bangladeshi ship recyclers have officially received the certified copy of the court order that allows them to import vessels until October 12th.
The week ended with 7 vessels reported to have been headed to the scrap yards of total deadweight 194,364 tons. In terms of the reported number of transactions, the demolition activity has been marked with 37% decline from previous week’s activity, while there has been a 71% decrease of the total deadweight sent for scrap. In terms of scrap rates, this week the market witnessed a demo deal secured by Chittagong scrap buyers, the first since the official extension of the market, for a bulk carrier of 89,618 dwt with 17,195ldt beached for $465/ldt, including 300 tons bunkers remaining on board. India still attracts the lion share of the activity as it holds 57% of this week’s total demolition activity, while also some activity has been recorded also in China in the dry sector at region mid $450/ldt. At a similar week in 2010, demolition activity was standing at same levels, in terms of the reported number of transactions, 13vessels had been reported for scrap of total deadweight 166,450 tons with no activity in the bulk carriers segment and tankers with liners holding 85% of the total activity. Pakistan was in the forefront by offering $395/ldt for dry/general cargo and $435/ldt for wet cargo.

GREEK PRESENCE
Greek owners remain sceptical for their investments in the secondhand and newbuilding market being more open to move from their traditionally investments in the bulk carrier and tanker segment to new types of investment. This week, Greek owner Dynagas has placed an additional pair of LNG units of 155,000 cum capacity in Samsung Heavy Industries, as an extension of the original order placed in May. In the bulk carrier segment, Greek owner Polembros is said to have placed an order for three units of 206,000dwt in China’s Shanghai Waigaoqiao Shipyard at an undisclosed contract price for delivery in 2013. In the secondhand market, Greek owners made their presence in the gas tanker segment by buying a small LPG unit of 7,099 cu.m gas capacity built 2000 for $15,5 mil including 2years time charter agreement back to the seller.