Wednesday, 23 April 2014 | 17:34
View by:

Ship owners return to shipyards with new orders despite warnings from industry members

Wednesday, 22 February 2012 | 00:00
A series of warnings from senior industry leaders against more new building orders, it seems that a lot of ship owners are still looking for more deals with shipyards, oblivious of the concequences on the general market balance of demand and supply. Already plagued with oversupply issues, most shipping markets are having to sustain heavy pressures in terms of low rates, as a result of too many ships competing for too few cargoes. Still, as it turned out last week, there was a resurgence in activity in the new building market with report of new business being concluded across a variety of sectors. In its latest weekly report, Clarkson Hellas mentioned that “whilst new enquiry in the beginning parts of the year was somewhat tentative, these latest orders do help to highlight that interest is beginning to grow again as we proceed further into 2012. Newbuilding pricing has continued to soften and with the charter market continuing to look like it will remain somewhat challenging in the short term, owners are increasingly looking towards the future. As was witnessed throughout 2011 and in the early stages of 2012, many of the shipyards have focused their efforts in improving the efficiency of their designs and have made significant inroads to improving on their fuel oil consumption figures.
Bunker pricing has historically been closely correlated to that of Crude Oil and with the potential for this to rise further on the back of any further growth in oil demand, or with simple price shocks in the market, the importance of these design improvements and the subsequent savings over current design on the water, cannot be understated. It will be interesting to see which owners over the coming months look to take advantage of the perceived oversupply of capacity in the market, to place orders and therefore take advantage of these potential future savings on fuel” concluded Clarkson Hellas.
In a separate report, shipbroker Golden Destiny said that “the newbuilding business keeps its downward pace with shipyards feeling the pain from the slump of the freight markets. South Korean Shipyards, Sekwang Heavy Industries and Samho Shipbuilding, are set to finally close after failing to find a buyer, while 21st Century Shipbuilding is running out of work with not receiving new orders for several months now. Ship-owners are not in hurry to sign new deals either for dry or wet units waiting to see the performance of the freight market and the new trends in newbuilding prices.
Overall, the week closed with 18 fresh orders reported worldwide at a total deadweight of 1,402,240 tons, posting a 5% week-onweek decline with 4 transactions reported for bulk carriers, 6 for tankers and for gas tankers. This week’s total newbuilding business is up by 20% from similar week’s closing in 2011, when 15 fresh orders had been reported with bulk carriers and containers grasping 53% share respectively of the total ordering activity. In terms of invested capital, the total amount of money invested is estimated at region $1,32 billion with 1 transaction reported at an undisclosed contract price. The most overweight segment appears to be the LNG segment by attracting 61% of the total invested capital” said the Piraeus-based shipbroker in its report.
It carried on by mentioning that “in the bulk carrier segment, U-Ming Marine Transport Corp, a member of the Far Eastern Group, placed an order with Shanghai Waigaoqiao Shipbuilding Co to build up to 10 capesize vessels at a price of region $49,8mil each with delivery in 2014.
Oceanfreight of Greece is said to have received a $120 million loan from China Development Bank ($108mil) and Bank of China ($12mil) for covering the construction of three bulk carriers from Jiangnan Shipyard Group Ltd. for delivery in 2013. The size has not been yet specified, but sources suggest that the units will be kamsarmaxes or mini capesizes.
In the tanker segment, Norwegian shipwoner John Fredriksen has placed an order for four 51,000dwt product tankers, with an option for two more units, for delivery in 2013 at STX Offshore & Shibuilding at a total cost of $209 mil. Furthermore, the owner in an interview in Financial Times unveiled its plans for ordering VLCC units for his newly founded Frontline 2012 defying vessels’ market glut.
In the gas tanker segment, the LNG newbuilding interest is very strong as the demand outlook from the two world’s largest consumers, Japan and South Korea, seems strong and owners are scheduling their investment plans. Sovcomflot of Russia has boosted its LNG orderbook at South Korean shipbuilder STX by declaring an option for two more units from its original contract placed at the end of May last year. Sovcomflot originally contracted two of the 170,200 cu.m LNG units at a price of region $205mil per vessel and now exercised its option for two more similar units with delivery in 4q 2014 and 1q 2015.
Furthermore, Golar LNG has entered into two newbuilding contracts for 162,000 cu.m new buildings with fixed priced options for a further two with the Korean shipbuilder Hyundai Samho Heavy Industries Co., Ltd. ("Hyundai") for delivery during the third quarter of 2014 and the other will deliver during the fourth quarter of 2014. The total cost of the two vessels is slightly above $400 million. Also, Greek player Dynagas is rumoured to be behind the order for an additional LNG pair, of 162,000 cbm, in South Korean Shipbuilder Hyundai Heavy Industries that are scheduled for delivery in the following year, after confirming four LNG carrier newbuildings of 155,000 cbm last year. In last, Chinese shipbuilders is said to have been asked an indication for their availability to construct two 170,000 cbm LNG carriers that are expected to be owned jointly by UK-listed BG, CNOOC Energy Technology & Services and the Cosco China Mechants joint venture China LNG Shipping (Holdings) Co (CLNG)” concluded Golden Destiny.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
    There are no comments available.
    In order to send the form you have to type the displayed code.