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Newbuilding ordering activity on a slow start to the year

Wednesday, 25 January 2012 | 00:00
As expected by analysts, the shipbuilding market has been relatively quiet at the start of the year, when it comes to newbuilding ordering activity.The colossal orderbook in many ship segments is acting as a significant burden for ship owners who can't secure higher freight rates for their existing fleets, as too many ships are competing for the same cargoes. As a result, further ordering is looking to be less of an attractive choice for more and more ship owners. This has been the case since the start of the year, although it's still quite early to say if this trend will continue in the coming months.
For the time being though, the newbuilding market has been quiet this week with many of the major yards in the Far East beginning to wind down in advance of next week, where they will celebrate their Lunar New Year holidays. According to the latest weekly report from Clarkson Hellas "with this in mind it is perhaps unsurprising that there has been only a small amount of new business being reported as concluded, with these limited orders mainly being placed in the Tanker and Gas sectors. The week has seen very little dry bulk enquiry, though given the combination of this Lunar Holiday period, in conjunction with the continued decline of the Baltic Dry Index since the turn of the Calendar New year, this is perhaps unsurprising. When the yards do begin to return from this Holiday period and again face the challenge of filling their 2013 capacity, it will no-doubt be against the backdrop of a continuation of these challenging market conditions and for the time being expectation remains that pricing, in China in particular, will have to adapt accordingly in order to generate a pick-up in demand sufficient to fill this excess capacity" said Clarkson Hellas.
In a separate report on this week's ordering activity, Piraeus-based shipbroker Golden Destiny said that "the third week of January closed with the newbuilding business showing that the weak appetite for new contracts remains as the current status of the freight market does not support investments for newbuilt units in the conventional vessel segments, bulk carriers and tankers. The level of this week’s ordering business is similar with the previous week with only two newbuilding transactions recorded in the bulk carrier segment and notable ordering business in the crude tanker segment. Overall, the week closed with 13 fresh orders reported worldwide at a total deadweight of 979,400 tons, posting a 8.3% increase from similar week’s closing in 2011, when 12 fresh orders had been reported with 3 contracts in the bulk carrier segment, 4 in the tanker, 2 in the container and 2 in the offshore segment. In terms of invested capital, the total amount of money invested is estimated to be at more than $2,9 billion, 7 transactions reported at an undisclosed contract price, with offshore segment appearing the most overweight by grasping more than 96% of the total invested capital this week due to hefty investments on drilling and offshore gas facilities" said Golden Destiny.
It went on to mention that "in the bulk carrier segment, Turkish player Ince Denizcilik has ordered two supramax units of 57,700 dwt at STX Dalian of China with delivery in second quarter of 2013, no contract price has been disclosed. In addition, rumors circulated that STX Pan Ocean has placed newbuilding orders for five handysize units and one capesize for delivery in 2013 at STX Offshore & Shipbuilding of China.
In the tanker segment, notable order has been revealed in the crude aframax segment by China Shipping Development, one of the country’s largest shipwoners, for one unit of 110,000 dwt to be built in Jiangsu Shipping Industrial at a price region of $53 mil for delivery in 3q 2013. In the gas tanker segment, Indonesian oil major Pertamina has concluded a deal to order a 3,500 cbm LPG carrier at Taizhou Yuanyang shipyard of China for delivery in the fourth quarter of 2012 at a price region $14 mil. In addition, Evergas is said to have ordered four ethylene LPG carriers at Sinopacific Offshore and Engineering Shipyard of China, which will be either 12,000 cbm or 17,000 cbm at a cost of either region $43 mil each or $50 mil each respectively and the units will be built to the highest specifications.
In the offshore segment, a remarkable order has been announced by South Korea’s second-largest shipbuilder Samsung HI announced for the construction an offshore gas processing facility for oil and gas company INPEX. The 2.6 trillion won ($2.26Bn) facility would be used to process LNG in Australia. Furthermore, Daewoo Shipbuilding has been awarded a new contract to build one semi submersible drilling rig for Norwegian owners Odfjell Drilling at a value of $616,5 mil. The new rig is a GVA7500 harsh environment design, for delivery in May 2015 and will be chartered to BP for installation in UK waters west of Shetland" concluded Golden Destiny.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
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