In Hellenic Shipping News 13/05/2015
Shipyards around the world are bound to start offering more aggressive discounts, if they are looking to book more of their empty berths from 2017 onwards, as newbuilding activity has slowed down considerably. According to Allied Shipbroking’s latest weekly report, “new contracting is set to achieve the lowest activity noted since the early 2000, with yet another month having closed off with week num-bers especially on the dry bulk side”.
Allied said that “as a consequence estimated prices which are on offer by shipbuilders continue on their downward trend, but to little avail as there are still less then a handful of buyers looking at the option with serious interest. At the same time the rate of cancellations and slippages of the orderbook continues to climb, with delays in construction and many owners looking to offload some of their previous made orders and limit their exposure. At the same time, the prevailing sentiment for Dry Bulk contracting has possibly acted as a catalyst for other more promising sectors such as that of containerships and oil tankers. The former has seen yet another round of large contracting take place both in terms of number of units as well as capacity. The latter, on the other hand, seems to be feeding off the still bullish freight levels being an ease choice for dry bulk own-ers to switch their current orders over to vessels that have some kind of similarity in terms of management expertise”.
In a separate report, shipbroker Clarksons Hellas noted that “whilst there are no new orders to report for Tankers this week, there is one order in Dry with Polish Steamship extending their order at Jiangsu New YZJ by declaring an option for two 36,500 DWT Bulk Carriers. These will be 2nd and 3rd vessels in the series and will deliver in 2018. The container market has seen a single order this week, with Maersk Line reported to have ordered four firm plus seven optional 20,000 TEU Container Carriers at DSME. This new set of units are scheduled to deliver throughout 2017 and 2018 from DSME’s Okpo yard in Korea. Finally in other sectors, Royal Caribbean Cruises have announced the extension of their series at Meyer Werft by adding one 168,666 GT Cruise Vessel. This order will take the whole series up to 4 in total and will built at Meyer Werft’s Papenburg yard in Germany for delivery in 2019”.
Accordingly, shipbroker Intemodal said that “with very few orders being reported and prices still shaky, the newbuilding market seems unable to come out of the vicious circle it has been caught during the past year, while the effects of the lack of dry bulk orders, seems to have already caught up with expectations of key industry players. The Chairman of Yangzijiang, China’s biggest privately owned yard, appeared to be fairly gloomy last week in regards to the future of the shipbuilding industry in the country, stating that it is possible that the number of shipyards in China moves down to 1/3 in three years’ time with mergers and acquisitions as well as closures taking place. For as long as demand for new orders continues to fall short of existing shipbuilding capacity, pessimistic estimations like that will continue to make a lot of sense. At the same time, we expect that any increase in investing appetite for dry bulkers, will keep being absorbed by the second-hand market for at least another couple of quarters. In terms of recently reported deals, German owner, Reederei Nord, placed an order for two firm LR2s (115,000dwt) at Samsung, in S. Korea, for a price of $56.5 each and delivery set in 2017″.
Meanwhile, in the demolition market things are starting to heat up. According to Allied Shipbroking, “with new contracting at shipyards dropping and the rate of deliveries slowing, the large scale rush noted in the number of vessels sent for scrapping has provide to be a more the ample release valve, keeping fleet growth for yet another month in negative territory for most of the dry bulk sizes segments. Yet the pace of vessels being retired dur-ing the remainder of the year will depend heavily on the prices of-fered per ldt by most of the major scrapping destinations and for the time being and despite any contrary influences, prices have managed to keep their levels fairly well. Nevertheless, with the summer months approaching and monsoon season likely to take out a big bite out of the existing demand for tonnage from breakers, there is an expecta-tion of further softening of prices in sight. What’s more is that there is the real danger that as prices fall, they might stabilize at their new “reality”, keeping things subdued for the remainder of the year. After all this might even be why the current rate of scrapping is considered to not to be indicative to what we will see over the next three quarters of 2015″, the shipbroker concluded.
