The week ended with the demolition activity keeping its high pace, newbuilding momentum being at low record levels and secondhand ship purchasing momentum holding its last week’s firmness with the highest activity being recorded this week, total 26 secondhand transactions reported.
Overall, the newbuilding business is down by 50% in comparison with the buying momentum in the secondhand market, while the demolition activity is standing 11.5% lower levels than the volume of secondhand purchasing activity. The week closed with 49 transactions reported worldwide in the secondhand and demolition market, posting a 122.7% increase from a similar week in 2010 when 22 transactions had been reported and secondhand ship purchasing activity was 70% lower than the ordering business.

SECONDHAND MARKET
The week ended with firm activity both in the bulkcarrier and tanker segment, boosting the secondhand ship purchasing activity at higher levels than last week’s volume. Bulkcarriers hold 34.6 % of this week’s total volume of reported secondhand transactions while tankers 57.6%.
Overall, 26 vessels reported to have changed hands this week at a total invested capital in the region of US$ 498.3 million. In terms of the reported number of transactions, the S&P activity is up by 62.5% from last week’s activity and up by 73.3% comparable with previous year’s weekly S&P activity when 15 vessels induced buyers’ interest with bulk carriers and tankers grasping 40% share of the total volume of S&P activity. In terms of invested capital, although in the tanker segment were reported sold 6 more vessels than the activity in the bulkcarrier sector, both sectors attracted similar invested capital, 44.9% and 48.9% respectively.

NEWBUILDING MARKET
The last week’s high newbuilding momentum seemed be just exceptional due to a large number of orders revealed in Japanese yards in the bulk carrier segment and high levels of activity in the offshore segment. Overall, the week closed with 13 fresh orders reported worldwide at a total deadweight of 499,800 tons, posting an 80% week-on-week decline with activity in the bulk carrier segment being only for two very large ore cape units contracted by undisclosed Norwegian owner in Chinese yard at region $60 mil each. This week’s total newbuilding business is down by 74% from similar week’s closing in 2010, when 50 fresh orders had been reported with bulk carriers and containers being the protagonists by grasping 52% and 20% share respectively of the total ordering activity. In terms of invested capital, the tanker segment seems to be the most overweight due a 6 chemical units order of 19,800 dwt stainless steel tankers placed by UK owner, Zodiac Maritime Agencies Kitanihon Shipbuilding of Japan at an estimated price of $35 mil each, $210 mil in total.
In the bulk carrier segment, Japanese yard Oshima Shipbuilding is rumored to have received a ten newbuilding orders for its newly developed energy efficient 77,000dwt and 82,000dwt bulkers, which reduce fuel consumption by 10-15%, for delivery after 2014. The Japanese shipyard has developed the world’s most energy efficient ships, which helped it for winning new bulker orders, according to asiasis. Furthermore, some news came to the light that the Canadian shipowner Fednav is looking in an order for up to four ice class strengthened capesize bulkers, valued nearly at $200mil per unit, to transport iron ore from Accelor Mital’s $5bn Baffinland iron ore project.
In the passenger segment, China is set to make a surprise debut in the cruise ship sector with a domestic order. According to local media reports, Xiamen International Cruise and Shan Hai Shu Group, a leading real estate and tour company, have signed an agreement with Xiamen Shipbuilding industry for a 100,000gt vessel. Shan Hai vice chairman George Buge Zhang describes the ship as able to accommodate 2,000 passengers and 1,000 crew. He said it will cost around CNY 1,5bn ($234,5m) to build, which is sustainable lower than that could be obtained from European and Japanese yards that specialize in cruise ships.

DEMOLITION MARKET
In the demolition market, the last two weeks there has been a sense of stability in the price levels offered in Indian subcontinent region and China with India leading the market in terms of volume of transactions and prices. In the Bangladesh, the deadline of the last extension given in the market approaches and there are slow signs of scrapping activity till country’s ship recycling activities are secured again. India is paying region $505/ldt on the dry side with tankers seeing premiums excess $530/ldt if they contain specific amount of bunkers or stainless steel. However, the market may experience again some firmness in the levels offered in Chittagong as we move near to the review of Bangladesh extension. In the Pakistan, the levels offered are $15-$20/ldt below from their Indian and Bangladeshi counterparts and minimal activity is been recorded. As Ramadan period has now ended and Bangladesh may close again mid October there are hopes for stronger scrapping activity in Gadani.
The week ended with 23 vessels reported to have been headed to the scrap yards of total deadweight 1,063,319 tons. In terms of the reported number of transactions, the demolition activity has been in the same levels from previous week’s high levels, while there has been a 40.6% increase in terms of the total deadweight sent for scrap. In terms of scrap rates, the highest scrap rate has been achieved this week in the bulkcarrier segment for a 82,513dwt vessel built 1983 with a lightweight of region 14,947tons that has been sent for beaching in Bangladesh at $543/ldt. Bulk carriers continue to be the most popular scrap candidates grasping 60.8% and liners follow with a 26% share, whereas scrapping activity in the tanker segment remains limited with only 2 units reported for scrap. India and China are in the frontline by attracting most vessels, while this week they won 26% and 21.7% respectively of the scrapping business. At a similar week in 2010, demolition activity was standing at 69.5% lower levels, in terms of the reported number of transactions, when 7 vessels had been reported for scrap of total deadweight 236,806 tons with tankers holding 43% of the total volume of activity and only one panamax bulk carrier sent for disposal. India and Pakistan were offering $395 -$405/ldt for dry/general cargo and $430-$445/ldt for wet cargo, while Bangladesh market was inactive.

GREEK PRESENCE
Greek owners are absent from the newbuidling investment but present in the secondhand markets. In total four units were acquired by greek interests, one in the dry kamsarmax sector ,two in the small chemical tanker sector and one in the sub-panamax container sector. The total amount of money invested is estimated to be in the region of usd $ 60 mil.