In Hellenic Shipping News 27/01/2016
In the demolition market, the shipbroker noted that “it looks as though the number of demo candidates has started to pile up quickly, possible pushed by the fact that lay-up costs being quoted in the market are prohibiting for overage units, while the dire conditions being noted in the dry bulk market are expected by most to be weathered for a considerable amount of time. With many trying to take advantage of the current going scrap prices, before any further drops are noted, the excess supply of tonnage available to cash buyers has already allowed for a strong drop to be noted over the past week, while at the same time demand from the side of end buyers has already showed signs of easing as they close up on their current capacity”, Allied concluded.
The story of the shipbuilding market so far has been one of frustration, as the demise of both the dry bulk and the container markets, coupled with a dramatic retreat of any ordering activity in the offshore market as well, has reduced most shipbuilders’ bottom line, leaving them to scramble for new building orders to just the tanker market, which, of course, is unable to sustain all of them.
In its latest weekly report, Allied Shipbroking noted that “with the pie shared amongst shipbuilders getting ever smaller in size and the focus amongst potential buyers centering still on mainly the tanker market, difficulties are being raised exponentially and the pressure is on for shipbuilders to find innovative ways to deal with the current market situation. Prices have remained fairly unchanged these past couple of weeks, though in their majority it seems as though this has only been due to the lack of actual transactions in the market, giving a possibility that there might be considerable dis-counts in the works which might come to light over the coming weeks. The drop in commodity prices will surely assist in allowing for some further discounts to be offered but will likely be the case that as shipbuilders are financially restricted as things stand now, they will likely focus in offering other extras and flexibilities to the con-tracts themselves rather then just resorting to lower prices. In any case it looks as though the market tempo will continue as is for some time”.
Meanwhile, in a separate report, shipbroker Clarkson Platou Hellas said that it was “ a relatively quiet week in the newbuilding market, with a few orders to report. In Dry, only one order to report this week, with Nippon Yusen Kaisha (NYK Line) announcing an order at Oshima Shipbuilding for one firm 65,000 DWT Wood-chip Carrier. This order is backed by a long-term charter with Hokuetsu Kishu Paper Co., Ltd. and is set for delivery within 2018. There are several orders to report in other sectors. Grimaldi Group have extended their order at Zhejiang Yangfan by declaring an option for two 7,800 CEU PCTC for delivery in 2018.
Grimaldi Group had ordered five firm plus seven optional 7,800 CEU PCTC at the Chinese yard back in June last year, and these two declared optional units will be the 6th and 7th vessels in the series. Guangzhou Hangtong have announced contracting two firm 7,800 DWT Asphalt & Bitumen Carriers with Tianjin Southwest Maritime for delivery in 2017. Although contracted some time ago, it only came to light this week that the same owner also have placed an order for one firm 17,000 DWT Asphalt & Bitumen Carrier at Huangpu Wenchong. This single unit will deliver within 2018”, Clarkson Platou Hellas concluded.
In the second hand market, Allied said that “on the dry bulk side, activity reported in the market continues to set new market levels with further decreases continuing to make head way and pushing values ever lower. With earnings now pushing to some of the lowest levels noted historically there seems to be still room for further price drops to be seen while it looks as though it will be the older tonnage that will suffer most as lower scrap values means for ever lower residual value to support these vessels. On the tanker side, things seemed to have been up for a shake up this week with several sellers seemingly dropping their ideas and as such pushing for a slight correction from the previous highs. The uncertainty that has begun to circulate the market regard prospects of the oil industry has been reflected in part, though with freight rates still at overall “good” levels it looks as though this will be a marginal correction for the time being”, Allied concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
