S & P

Despite the quietening effect of the National Day celebrations in China this week, we have still seen a reasonable level of sale and purchase activity largely dominated by vessels being sold out of Japan. 

Three Newcastlemax 206,000 dwt n/b bulkcarriers for delivery December 2011, January 2012 and June 2012 from Universal (originally ordered by Korea Line), have been sold to Taiwanese buyers, the first two to Hsin Chien at US$ 56.5m and the third one to China Steel at US$ 56.25m.

In the Capesize segment, clients of K-Line invited offers at the end of this week on M/V CAPE WAKABA (171,978 dwt 1996 blt Kawasaki H.I.) and are now understood to have sold her for a price at region US$ 18.2m to Greek buyers.

In the Panamax sector, values for late 90's built units showed signs of further softening this week, M/V BUNGA SAGA 9 (73,670 dwt 1999 blt Hyundai H.I.) controlled by clients of MISC, has now been sold at US$ 16.75m to Korean buyers.

Supramax and Handymax values have remained relatively firm in recent weeks, further evidenced by the sale by clients of Sanko Steamship of the 8 hold/hatch boxed bulker M/V SANKO SUMMIT (50,655 dwt 1999 blt Namura) for US$ 16.5m to Greek buyers. We also understand that the logs-fitted handymax M/V DRY BEAM (46,619 dwt 2005 blt Oshima S.B.) has now been committed at US$ 22.5m to Hong kong based buyers while the M/V FREE LADY (50,246 dwt 2003 blt Mitsui) has been sold within Greece for US$ 21.85m.

On the overaged tonnage Chinese buyers have made a move for M/V SIAM GARNET (35,501 dwt 1984 blt Tohoku) and concluded her at US$ 4.5m. 

The crude second-hand market took another downturn this week with the sale of the Japanese controlled VLCC TAKASE (314,250 dwt 1999 blt Mitsui SB) at US$ 27.75m to Greek interests - the sale represents another new low in this current cycle for 12 year old vessels at only a 28% premium above today's scrap levels. Remind you that near the top of the market, in late 2007, a 12 year Vessel was sold for in excess of US$ 100m (namely the 'SAGA CHELSEA' about 298,432 dwt, built DAEWOO 1995) which has since been sold this summer for US$ 25.3m).

On another sale, Greek interests have purchased M/T GENMAR REVENGE (96,755 dwt 1994 blt Samsung) for US$ 9.1m. 

With more tonnage coming onto the market from Japanese interests it is difficult to say whether we have hit the bottom yet in second-hand crude values, however with the margin between demolition and second-hand values decreasing with every sale, only a fall in demolition prices will allow any further significant downwards corrections and as we stand the sentiment within the demolition market is still relatively firm.

 It is interesting to note that we have not seen the same dramatic drop in values in the Products sector or the very modern crude sectors where a combination of a lack of liquidity, underlying confidence and higher book values are holding prices up  

As expected, this week has been rather quiet to say the least with the Chinese on National Day holidays all week. Following this period of rest and reflection it will be interesting to see how the Yards will approach the strategy for the last quarter of the Year and whether the story of the Chinese State Yards driving the pricing down will continue in dry and wet.

With the continued development of new more economical designs in both wet and dry it will be interesting to see if this will help the Yards to tempt the owners to contract from the economically challenged countries in the West over the coming weeks. The joy for the Owners and the charterers of these new ¡°eco¡± Vessels is that once delivered they typically can reduce bunker consumption by 1020% against the Vessels being delivered today. With Bunker pricing currently in excess of USD600 a tone and no signs of an imminent let up it will certainly help the Owners have an easier job of fixing their ships against the ships currently on the wate

As will certainly be much more appealing!

In terms of reported business; In Dry, Clients of Foremost Maritime are reported to have ordered a pair of 87,000dwt post panamax bulkers at Hudong Zhonghua for delivery in 2013, though we understand this order was placed earlier this year and is only just coming to light. Similarly, though in Containers, it has emerged that Clients of Arkas Container Transport placed an order with STX Dalian for a pair of 2,900 TEU container vessels which we understand was signed earlier this year during the summer. These vessels will deliver in 2013 and understand were signed at a price of circa US D36.5 Mill.

In Wet, we understand Rongsheng have won an order for a pair of 75,000dwt Shuttle Tankers which are set to deliver in 2H 2013. No pricing details have been disclosed.

In other Sectors, Tsuji Heavy have won an order from Clients of Nor Lines for 2 option 2 x 5,000dwt LNG Fuelled MPPs. These specialised vessels are due to deliver in Oct 2013 and Jan 2014 and we understand have been signed at a price of circa USD 38 Mill per vessel. Finally Maritime Nantaise interests are reported to have signed and order for 2 option 1 x 12,600dwt RoRos with Hyundai Mipo for delivery in 2013.

NEWBUILDING