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Newbuilding ordering activity expected to pick up but not in dry bulk or tanker markets

Thursday, 16 February 2012 | 00:00
With oversupply being the major issue across most sector, ship owners are expected to turn their attention to other niche markets, such as the LNG and offshore segments, instead of the more traditional tanker or dry bulk ones. In its latest weekly report, Clarksons Hellas said that "owners and yards alike have been keen to see what lies ahead in the post Lunar New year market and for the time being - with large amounts of early capacity still available at various yards it will be interesting to see just how keen some yards will become in order to win some potentially vital new business. With some yards in China now becoming increasingly flexible through payment structures and terms offered, it will likely not be too long before some owners are tempted to order the new generation eco designs at levels close to or below levels we have seen in the past decade. Having discussed the merger of two Japanese Yards last week, it is sad to see reported this week that two of the Korean Yards have not been as lucky to receive such good news. Samho Shipbuilding in Tongyong, which has historically specialised in building Chemical tankers and Handysize bulkers no longer has the support of the creditor bankers after the demise of their sister shipping company and will now reportedly only complete slowly two handysize hulls before ceasing business. Sekwang Heavy Industries, who again have their main history in the Chemical tanker newbuilding sector along with more recently a diversification into the offshore sector have found no buyers after being put into court protection and again will now reportedly build any further Vessels" concluded Clarksons Hellas.
In a separater report, shipbroker Golden Destiny said that “the newbuilding business remains stagnant with offshore and LNG segments attracting investors’ focus that are seeking for newbuilt vessel to diversify their core business and adjust in new market fundamentals. No fresh activity has been reported this week either in the bulk carrier or tanker segment with subdued sentiment in the freight markets discoursing owners’ decision for new investment plans. South Korean yards with market expertise in the construction of more specialized units will be again the beneficiaries for the year 2012, while consolidation in Japan and China’s Shipbuilding industry is likely to be the key issue in the coming months as a solution to the dried out of newbuilding business and the slide in newbuilding prices. Overall, the week closed with 19 fresh orders reported worldwide at a total deadweight of 235,200 tons, posting a 90% week-onweek increase due to 75% stronger business for offshore units. This week’s total newbuilding business is down by 51% from similar week’s closing in 2011, when 39 fresh orders had been reported with bulk carriers, tankers and containers grasping 44%, 18% and 26% share respectively of the total ordering activity. In terms of invested capital, the total amount of money invested is estimated at region $1,5 billion with 9 transactions reported at an undisclosed contract price. The most overweight segment appears to be the offshore segment with 14 fresh new orders by attracting 72% of the total invested capital” said the Piraeus-based shipbroker.
It went on to mention that “in the bulk carrier segment, an Indian utility and mining group, Haryana based Lanco Infratech, is considering a series of 15 or more kamsarmaxes, between 80,000dwt and 85,000dwt, to build its fleet so as to have greater control over its cargoes and reduce its dependence on chartered vessels. The owner is already approaching yards in China and South Korea that are more competitive on newbuilding prices offered. The order is said to be placed by autumn with deliveries in mid 2014.
In the gas tanker segment, Norway’s Hoegh LNG declared its option for a third floating storage and regasification unit of 170,000 cu.m at South Korea’s Hyundai Heavy Industries for a price region $250 mil with delivery in June 2014. There are options for three more, the original two were ordered last year. The booming LNG sentiment encouraged the owner to add one more unit after securing firm contracts to employ the similar vessels ordered last year. Höegh LNG and Perusahan Gas Negara finalised a deal on 25 January to employ the first vessel off Belawan in North Sumatra. Earlier the same week, Höegh said it had won a tender offer to deploy the second FSRU newbuilding, in a project in Klaipeda, Lithuania. CEO Sveinung Stohle said with the two earlier-contracted vessels now employed, a third one was ordered to follow the company’s strategy to grow its footprint in what it believes is a growth segment. Höegh placed 22.6M new shares with investors for 53 kroner ($9.09) per share and lifted about 1.2Bn kroner in fresh equity for financing its third newbuilding, the company said in a separate statement. Furthermore, Russian shipowner Sovcomflot is going to exercise its options for two LNG units of 170,200 cbm ice class 1C tri fuel at STX Offshore and Shipbuilding with delivery at the end of 2014 and early 2015. In the LPG segment, Hyundai Heavy Industries has won a LPG contract by Pertamina of Indonesia for a unit of 84,000cbm, with an option for one more, for delivery in the second half of 2013. The newbuilding cost of the unit is said to be at $77 mil due to higher specifications than the average design requested by the owner. In addition, partners of Unigas pool are under discussions to place and order for three plus three LPG ethylene carriers of 12,000cbm at a price between $38,5mil and $40mil each. The three partners, Othello Shipping, Schulte and Sloman Neptune, are expected initially to sign up for one vessel each with potential South Korean yards, Daewoo Shipbuilding & Marine Engineering and STX Offshore and Shipbuilding. A final decision will be concluded within the next two or three months” said the report.
Finally, “in the container segment, the Hamburg-based company Peter Dohle has concluded an order for one 4,800 teu unit, with an option for one more, at Jinling Shipyard, for delivery in the first quarter of 2014. Sources reveal that the owner placed the order prior to the Chinese New Year last month at a cost believed to be $55 mil each. The yard is said to be the first time that builds such large units as it has only previously built boxships up to 1,100 TEU” concluded Golden Destiny.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
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