With the current orderbook for most ship types and classes far exceeding demand and most ship owners having already taken advantage of the fall in pricing for new buildings, ordering activity has been quite modest during these past few weeks.
According to the latest report from Clarksons, “with everyone now back from their summer holidays, the market has still remained quiet with owners seemingly remaining cautious when it comes to placing any new orders, even when faced with some attractive opportunities from the Chinese yards, who as mentioned in previous reports are keen to fill their remaining 2013 capacity. It will be interesting to watch how this story develops, especially if there is any truth to the rumours currently doing the rounds vis a vis potential ordering of VLCCs at Chinese yards, as this in turn will guide yards pricing ideas going into the latter stages of the year.
With the conventional markets looking set for some choppy times ahead, yards are looking at other sectors to take up the spare capacity left by the lack of dry and wet ordering. With the continuing high oil price, focus has naturally turned towards the Offshore market as perhaps being able to play this white knight role until the other sectors start to see some recovery, however although values for offshore assets are high, it is unlikely that the number of orders will get close to filling the yards capacity requirements in the upcoming months and they may find themselves competing over relatively few orders between themselves!” said Clarksons in its weekly bulletin.
Meanwhile, in a separate report, Piraeus-based shipbroker Golden Destiny said that “after silent newbuilding activity of the last three weeks, we witness again a boost of business by Chinese and Korean yards with high activity in the offshore segment and a burst of activity in the bulk carrier segment, up 190 %w-o-w with contracting business in all vessel sizes. Japanese yards performance is still weak as the strength of the yen against the US dollar damages Japanese newbuilding business even for domestic orders. Overall, the week closed with 66 fresh orders reported worldwide at a total deadweight of 2,425,199 tons, posting a 200% week-on-week increase. This week’s total newbuilding business is up by 113.% from similar week’s closing in 2010, when 31 fresh orders had been reported with bulk carriers and containers being the protagonists by grasping 32% and 38% share respectively of the total ordering activity. In terms of invested capital, the offshore segment appears to be the most overweight due a hefty investment by Noble Corporation of Switzerland by exercising its final option for the construction of a fourth ultra deepwater drill ship in South Korean Shipyard Hyundai HI for delivery in 2h 2014 at a price believed to be $630 mil. In terms of volume of transactions, bulk carriers and offshore hold this week’s lion share of activity by grasping 44% and 30% respectively of the total newbuilding business.
In the bulk carrier segment, Chinese yards have made their presence strong with firm contracting activity for handysize and larger size units. The week closed with 29 bulk carriers reported worldwide with China grasping 58.6% share of the activity. However, some Japanese owners honored their domestic yards this week by contracting 10 units in total for panamax, supramax, handysize vessels and even some activity was recorded in the capesize segment” said Golden Destiny.
It also said that “in the tanker segment, eager activity has been witnessed in the MR segment amid oversupply issues and distressed freight market conditions. Notable order of this week is the 10units contract for vessels of 52,000dwt placed in South Korean yard, SPP Shipbuilding, for delivery in 2013 and 2014.
In the gas tanker segment, BW is said to be in talks with Hyundai Heavy Industries for its first LNG newbuilding order of two units after several years, while Greek shipowner Thenamaris has extended its LNG order placed in July for two 160,000 cu.m units in Samsung H.I. by adding one more unit for delivery in 2014.
In the container market, the post panamax ordering spree has eased off from August as uncertainty shadows the outlook of the market from European and U.S. sovereign debt. This week some business has been witnessed in the handy-small segment by SITC International Holdings of China that exercised an option to build two containerships of 1,100 TEU each with China’s Yangfan yard for delivery in August 2012 valued at a total of $36,2 mil. In addition, French line CMA CGM Group is said to be in discussions with South Korean Hyundai’s Mipo Dockyard for three more container-roro units with nominal capacity of 1,700 TEU extending its series order to nine units with delivery in 2014 at an undisclosed contract price. In the post panamax segment there are some rumors circulating that a Chinese yard, Penglai Zhongbai Jinglu Ship Industry, is in close negotiations with a European owner for the order of five 10,000 TEU units. Moreover, Greek owner Eurobulk is said to be in discussions with a South Korean yard, Ulsan based Hyundai, for five 5,000 TEUs units for delivery in 2013, at a total estimated price of $300 mil”.
Finally, Golden Destiny said that “in the offshore segment, the activity is 150% up from last week’s levels with 20new units reported worldwide. AHTS, platform supply vessels and drilliships are on the frontline as popular newbuilding investments with positive prospects for more intense activity for the rest of the year. Notable order of the segment has been the placement of three platform supply vessels by GulfMark Offshore of the U.S. in Poland’s yard Remontowa Shipbuilding at the contract price $112mil enbloc. Chief executive officer of the company said that they are excited about the initiation of their new construction program as recent oil/gas finds in the North Sea, a drilling focus on frontier areas and the announcement of more than 60 new offshore drilling rigs give them the confidence to initiate the construction of newbuilding vessels designated for this developing market. In addition, Noble Corporation of Switzerland exercised its option in Hyundai Heavy Industries for the construction of its fourth ultra deepwater drill ship at a price of $630 mil.
Chief executive officer of Noble stated that they continue to see an increase in deepwater demand, both near and longer term. This view is bolstered not only by geological successes in the traditional regions offshore the U.S. Gulf of Mexico and Brazil, but also by emerging regions offshore West Africa, Indonesia, Black Sea, India and Eastern Africa” concluded the shipbroker in its weekly analysis.