S & P

Japanese owners are reported to have committed their newbuilding Ore Carrier (297,000 dwt 4th Qtr 2012 UNIVERSAL) to undisclosed Far Eastern interest for region US$ 75m.

The dry trade OBO M/V FRONT STRIVER (169.204 dwt 1992 blt Daewoo)  reported sold to undisclosed buyers close to demo related numbers (23.076 ldt) US$ 12.5 m.

Clients of Zhoushan Zengzhou Shipbuilding have sold one of their Sdari designed, 57,000dwt bulker resales delivering November 2011 for US$ 26.5m to undisclosed buyers. This hull was an undeclared option from another buyer that the yard decided to build for their own account.

Another handysize bulker Hull 1004 (34,000dwt, delivery Nov 2011) by Clients of 21st Century Shipbuilding, reported sold to Greek buyers for US$ 25m.  

It has been a busy week in the Tanker Sale and Purchase market with the recent drop in values bringing new interest to the market.  

The market has again been dominated by sales of the larger crude carriers with two VLCC's sold this week. Earlier in the week c/o Oslo - listed Saga Tankers sold the M/T SAGA UNITY (298,920 dwt 2000 blt Kawasaki H.I.) at US$ 29.4m to Greek buyers. The decline in the value of the M/T SAGA UNITY since Saga Tankers took delivery of the vessel from Japanese Owners in April 2010 at region US$ 65m illustrates just how far asset values in the VLCC class have fallen over the last 12 months. Another sale is that of M/T SKY WING (299,997 dwt 2002 blt I.H.I.) again to Greek buyers at region of US$ 34.5m. The Vessel has Special Surveys due in January 2012.

The M/T MAOHI (46,177 dwt 2006 STX) reported sold at US$ 28.5m to Norwegian interests.       

Further reports of contracting again this week ¨C and although demand levels have certainly diminished post summer break, the Dry sector continues to keep the market ticking over.

In Korea ¨C the Big 3 remain in a holding pattern. Having had a relatively active year to date ¨C 2013 and in some cases 2014 capacity has been filled, and this in turn has alleviated the immediate pressure for yards to continue to push the market. With a number of outstanding options still pending, particularly for labour intensive asset classes such as LNG, we will need to wait until the year end before having a clear picture as to how capacity at the major yards will look going forward.

The situation in China remains much the same as we have discussed over the previous weeks and appetite for new business shows no signs of relenting from both State and Private yards. With Dry continuing to remain the key focus ¨C there is certainly an opportunity for owners to take advantage of competitive pricing from top tier Chinese yards and there is still a great deal of pressure in China, for yards to commit a large chunk of vacant 2013 capacity.

As to whether we have finally arrived at a clear bottom of the market - not an easy question to answerFrom a shipyard perspective, this answer can be considered on two levels ¨C Firstly, as we are seeing with the state yards in China, it is perhaps productivity that remains more critical than profitability and this is translating into some competitively priced opportunities. However, this is against what is becoming an increasingly strained environment for yards in terms of their input costs ¨C and the last time the dry market exhibited similar asset values, major input costs such as steel, were at almost 50% of present value.

Therefore, certainly questions over how sustainable existing asset pricing will be from the quality shipyards in both China and Korea, but also clear opportunities for owners prepared to make a move and take advantage of the current dynamic!

In terms of reported business; In Dry, ADM Shipping have announced that they have placed an order in Japan for 3 x 95,000dwt post panamax bulk carriers. It is understood these vessels will be built by Oshima Shipbuilding and although other details remain unconfirmed understand these will likely deliver in 2014. The Sinopacific group have won an order at their Dayang Shipyard from clients of Ciner Denizicilik for 4 option 2 x their Crown 63,000dwt Supramax Bulk carriers. These vessels will begin delivering in 2H 2012 onwards and are understood to have been signed at a price of circa USD 31 Mill each. Lastly, it has been reported that SITC International Holding had placed an order at Yangfan for a series of panamax Bulk carriers though understand this was in fact signed last year. These vessels will be delivering during 2012 and 2013.

NEWBUILDING