Newbuilding orders still remain subdued

The unstable eurozone climate, coupled with oversupply issues in the dry bulk and tanker markets, as well as a lack of financing continue to impact new building ordering activity. In its latest weekly report, Clarkson Hellas mentioned that “whilst there have been some further reports of new business being concluded this week, the newbuilding market has been a little bit subdued, both in terms of the number of firm orders placed as well new enquiries being seen in the market. As has perhaps been the case in the past, this is not surprising given the close proximity to Posidonia - and will be interesting to note what announcements of pending discussions are announced over the next 10 days.
The recent uncertainty surrounding the political climate in Europe has not perhaps had the most positive effect in the global financial markets – it remains to be seen whether this will have a knock on effect, through the availability of financial liquidity and whether in turn, this has a further disparaging effect on buying sentiment from the Western Markets. As always though and in spite of these challenges, Posidonia will give both owners and yards a good chance to discuss recent developments in the market, such as the major efficiency enhancements that have been made to many of the designs. With so much design work having been carried out in the last year, it will be interesting to see whether we are close to reaching the peak of performance for this latest generation of eco designs. If so, it may well spur further ordering across the sectors, as the buying markets gain confidence that new ships ordered today will remain competitive moving onwards into the future.
In terms of reported business; In Wet, Kyoei Tanker Co. are reported to have placed an order at Universal Shipyard for 1 x 318,000dwt VLCC. Whilst pricing remains unknown the vessel is understood to be due to deliver in Feb 2014 and will be built from their Ariake facility” concluded Clarksons Hellas.
In a separate report, Piraeus-based shipbroker Golden Destiny stated that there were just 10 orders reported this week, which represent a 52% decrease from the past week. “The orders were in the bulkcarriers sector and on the car-carrier sector. The total invested capital is calculated to be in the region of usd $ 267.8 mil, while the 2 panamax orders from Shenhua Zhonghai have been reported on private terms.
The bulkcarriers sector is the sector on which most Chinese yards depended their existence and performance, and that is one of the reasons why the Chinese shipbuilding industry is also facing issues on their orderbook, or even better on the lack of business they have. All 8 units were ordered at Chinese yards, 2 of them from Chinese investors and 6 from Italians. 2012 has proved to be a very difficult year for the newbuilding industries of all the countries. According to Fairplay, orders for Japan have presented a 3year low since the beginning of the year.
The car-carrier sector has shown activity since the beginning of the year, with 5 orders to have been placed so far. This week Eukor Car Carriers of South Korea has placed an order for 2 units of 6500car capacity at Hyundai Heavy Industry at a reported cost of $ 67 mil for each vessel, with holding option for two more” said Golden Destiny.
It carried on by mentioning that “lastly, although no fresh orders have been revealed in the tanker sector, Sovcomflot seems to have cancelled 2 contracts of aframax vessels at domestic shipyards. According to market sources, the vessels were part of a series of up to 12 vessels ordered back in 2010 in a joint venture between Daewoo of Korea and United Shipbuilding Corp of Russia” it said.
Finally in the demolition market, Golden Destiny said that “scrapping activity continues to be strong while demolition prices have a decreasing trend. In total the week ended with 21 vessels reported for demolition, 5% higher than last week, while in terms of deadweight the figure this week is 30% less. The activity is at almost similar levels with the relevant period of last year, when 17 vessels were reported for demo of a total of 1,221,749 tons deadweight. Most activity was in Bangladesh and India, although for the majority of the reported demolition deals no information were disclosed, therefore 49% refers to deadweight that went to undisclosed destinations. It is worth noting that in the container sector; so far the capacity scrapped has reached 124,000teu, while Alphaliner reports that the total containership capacity to be scrapped for the whole year is forecasted to exceed 200,000teau” it concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide