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Shipbuilding ordering activity on a low speed at start of the year

Wednesday, 18 January 2012 | 00:00
It's been a slow start to the new year, in terms of newbuilding ordering activity, which in turn could be perceived as positive news for the shipping markets across the board. Tonnage oversupply has been the reason of major distress in almost all the shipping industry, from dry bulk carriers and tankers to container ships. Analysts have argued that a decrease of newbuildings, coupled with higher demolition activity is the key for a sustainable rebound of freight rates.
In its latest weekly report, Clarkson Hellas said that "the year has begun with a subdued start and with Lunar New Year holidays on the horizon in the Far East we don’t expect January to be the most active of months in the Newbuilding market. However that is not to say that the market is devoid of opportunity. The most immediate challenge for both Korean and Chinese shipyards will be one of managing production. The current landscape in terms of production schedules for yards is jagged – with pockets of 2013 capacity still vacant, particularly in China. Even in Korea though, where capacity was reserved for outstanding options, there still remain these awkward pockets of vacant capacity that do need to be committed.
With strategy meetings in Korea to be held over the forthcoming weeks, it is plausible that we may see a push across certain sectors post Lunar New Year, as the shipyards aim to address these outstanding production issues. In China, the approach seems more immediate and with certain yards within the state sector having struggled to secure business in 2011, the pressure is on fill the outstanding 2013 capacity which is growing ever more imminent. With the demand side in no immediate rush to move, coupled with a continued tightening of debt availability, there seems to be no immediate rush to book new business. That being said, with certain sectors poised to present some enticing opportunities, it will be interesting so see how the story develops and whether yards will be competitive enough to entice buyers back into ordering!" concluded Clarkson Hellas in its report.
In terms of ordering activity, Piraeus-based shipbroker Golden Destiny said that the New Year "opened with fresh business in the bulk carrier and tanker segments being subdued, while offshore ordering activity continues in the frontline. Overall, the week closed with 13 fresh orders reported worldwide at a total deadweight of 153,600 tons, posting a 19 % week-on-week decline. This week’s total newbuilding business is down by 78% from similar week’s closing in 2011, when 58 fresh orders had been reported with bulk carriers grasping 73% share respectively of the total ordering activity. In terms of invested capital, the total amount of money invested is difficult to be estimated as 12 newbuilding orders have been reported at an undisclosed contract price" said Golden Destiny.
It went on to say that "in the bulk carrier segment, Chengzi Shipyard in China has won an order for two handymax bulkers of 49,000 dwt by Ningbo Fonwa Shipping for delivery in 2013. The units have been ordered for Chinese domestic coal trading.
In the tanker segment, Stena Bulk of Sweden with its partner Weco Shipping is said to be in discussions for a series of 52,000 dwt product tankers with Chinese yards, Guangzhou Shipyard International and Dalian Shipbuilding, plus a South Korean shipbuilder. The new medium range tankers will operate in the vegoil trade. In the crude market, rumors are circulating for the placement of five VLCC units of 318,000 dwt by Kuwait Oil Tanker in Daewoo of South Korea at a price region $111 mil. Other sources suggesting that Kuwait Oil Tanker has firmed up a contract for four VLCCs and one aframax tanker, while the company is in discussions for four medium range newbuildings with Hyundai Mipo at price region $40 mil. The units will cost more due to company’s high specification requirements.
In the offshore segment, Singapore rig builder Keppel’s US subsidiary Keppel AmFels LLC is said to have secured a contract from Diamond Offshore to construct and upgrade a moored submersible rig for delivery in 3q 2013 at an estimated price region of $150 mil. The rig will be designed to operate in depths of up to 6,000ft and will have a variable deck load of 5,000 long tones, a five ram blowout preventer and quarters capacity for 140 personnel" said Golden Destiny.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
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