New York Times - Ships and Shipping

Friday, 13 September 2013

Newbuilding ordering activity surges again as summer lull has officially ended

Newbuilding ordering activity surges again as summer lull has officially ended

It might have been a quieter summer in terms of newbuilding orders, but with the first days of September now behind us, activity has rebounded.
Wednesday, 11.Sep.2013, 22:17 (GMT+3)

It might have been a quieter summer in terms of newbuilding orders, but with the first days of September now behind us, activity has rebounded. As the weeks go by though and especially given the latest surge of the dry bulk market, more orders are expected to pour in. For the time being though, as Clarkson Hellas notes in its latest weekly report, "with the dry bulk newbuilding market remaining quiet towards the end of August, this week we have seen a limited number of orders to report although from a single owner and exclusively concentrated on the Capesize market. Rizhao Steel (Cara Shipping) are understood to have contracted two firm 180,000 DWT Capesize at both Dalian and Qingdao Beihai, with an additional two options at the latter.These orders are understood to have been concluded in the middle of this year, with delivery of the first vessel from Beihai lined up for 2015 and the remainder all due in 2016", the shipbroker said.

It added that "following a limited number of new orders so far this year, the VLCC orderbook, which currently stands at around 50 vessels, has seen the addition of two firm plus two option 300,000 DWT crude tankers from Metrostar at HHI. Although pricing remains undisclosed delivery of both firm vessels is planned for the first half of 2016. In the product tanker market we understand Clients of Capital Ship Management have declared two options in a series of 52,000 DWT MRs at Samsung Ningbo. These most recent contracts are both for delivery in 2016 and take the total series to six vessels. 

A polar opposite week of ordering in the container market with a small number of orders in the feeder sizes compared to the numerous orders for 14-18,000 TEU behemoths seen last week. Firstly, CMA CGM are understood to have converted a previous Con-Ro order into a series of three firm 2,100 TEU geared container carriers at Hyundai Mipo, with all the vessels due for delivery in 2015. The reported price for these ships is reflective of this restored order at USD 34 Mill. Clients of Lomar Shipping are understood to have declared options for the third and fourth in a series of 1,100 TEU feeder vessels at Jiangsu New Yangzijiang, similarly for delivery in 2015 and if the same pricing as the Vessels ordered last year, we expect it to be around USD 18 Mill for these geared ships.

In gas, and further ordering to report in the large LNG carriers, with Samsung tanking an order for two firm 174,000 LNG vessels from FLEX LNG. Pricing is understood to be just under USD 200 Mill per vessel with delivery of both in the first quarter of 2017. In other markets, and this week has seen Kline contracting a total of four firm 7,500 CEU PCTCs in Japan, with half the order split between Shin Kurushima and JMU. Delivery of the series is within 2015, although pricing was undisclosed", Clarkson Hellas concluded. 
Meanwhile, in a separate report, Golden Destiny noted that the past week ended with 60 vessels put on orders, with a total deadweight of 5,281,466 tons, while an additional 38 transactions reported at an undisclosed contract price. The invested capital revealed is about $1,64bn for 22 new orders. ( 21 bulkers, 18 tankers, 2 gas tankers, 2 liners, 5 containers, 1 passenger/cruise, and 6 special projects).

According to the Piraeus-based shipbroker "newbuilding activity was up by 88% week-on-week and 650% up year-on-year. The largest volume of newbuilding activity is reported in the bulk carrier and tanker segment with 21 and 18 new orders respectively. The accelerated newbuilding activity of this week is mainly attributed to the significant volume of business for MR product tankers at South Korean shipyards. Bulk carriers held 35% share of this week’s volume of new orders, tankers 30% share, special projects 10% share, while containers only 8% share and gas tankers 3% share.

At a similar week in 2012, 8 fresh orders had been reported with the largest volume of newbuilding activity with only 2 contracts, zero reported business for tankers and containers, 3 Ro-Ro and 3 special projects. Compared with previous week’s levels, a large increase of 91% in the volume of new orders is recorded in the bulk carrier segment (21 new orders from 11 last week) and 80% in the tanker (18 new orders from 10 last week).

In terms of invested capital, a hefty amount of money is invested in the tanker segment, 48% share of the total amount invested for newbuilding business, while high valued special projects keep attracting significant capital ( the construction of a drillship from Norwegian Flex LNG at Samsung for about $553mil). Chinese shipping players emerged strong this week in the placement of new contracts for capesize bulkers and Greek in the volume of tanker contracts", the shipbroker's report concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

Source: Sea News, Turkey.

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