The overcapacity of tonnage in major shipping markets like the crude tanker and the dry bulk has persisted these past few months, although things are much improved when compared to recent years. In any case, the pace of demolition activity will be crucial in offsetting part of the problem. In its latest report, Lion Shipbrokers noted that as per its sources, approximately 231 ships have been demolished over the first three months of this year out of which 213 units (93%) ended in Asia.
The scrapping pace is slower than last year but still at very good level; an average of 18 ships per week is recycled in 2014 compared to 22 ships per week in 2013:
India remains the world’s favourite demolition destination with 85 ships (37%) so far. It should be noted that for the first time since 2006, container ships are topping the demo-list. In total 55 container ships have been sold for scrap, or 24%.General Cargo ships closely follow with 54 units (23%), while tankers and bulkers follow with 45 and 44 units respectively.
During the course of the past, as per Shiptrade & Services, "performance in India has been impressive this week, with cash buyers offering very good numbers, something that, on the other hand, leads them to ask for unrealistic levels from local end buyers. Thus, owners that commit their units at very competitive prices, might end up with an unpleasant renegotiation headache by the time their vessels are ready to be beached. In Pakistan, it has been a quiet week, following the recent buying spree in the area, with the local market unable to compete with India, despite fundamentals remaining stable. The Bangladeshi market experienced levels that would not enable local players to compete with their sub-continent “rivals” and, as a result, bigger units ended up elsewhere, creating a need for local buyers to re-evaluate their options in order to step forward and claim their market share. In general, a softening in numbers is expected to come into the foreground, as both the monsoon season and the elections in India are in front of us. Add to this the budgets in Bangladesh as well as Pakistan, and there you have it. In Turkey, strong demand is there, while supply is relatively absent. As a result, we are seeing good levels being offered and end buyers acting quite aggressively. On the other hand, the Chinese market was quiet for yet another week, with activity focusing solely on state owned units sold to local yards, taking advantage of the subsidies offered", the shipbroker noted.
Meanwhile, newbuilding activity is still lagging behind the level observed during the first quarter, but as the Easter Holidays are now behind, orders are expected to pick up. According to the latest report by Clarkson Hellas Ltd., there were two order to report in dry this week. "Oldendorff have declared options for two further 208,000 DWT Newcastlemax at Taizhou CATIC. This takes Oldendorff’s total series at the yard to eight vessels, with delivery of the latest vessels in the last quarter 2016 and the second quarter of 2017. In the Handysize market, domestic buyer Xiamen Ocean Shipping has announced an order for five firm 38,300 DWT bulkers at Shanhaiguan, with delivery from 2016. In tankers, Sumitomo Heavy have taken an order for one firm plus one option 105,000 DWT Aframax from Finnish owner Lundqvist Rederierna, with delivery of both units in 2016. Just one order in the conventional container market with Shanghai International Port Group contracting four firm 1,020 TEU container carriers at Tsuneishi Zhoushan. Delivery of the vessels is split between 2016 and 2017. In the general cargo/MPP segment, Nanjing Ocean Shipping Co. (NASCO) contracted four firm 55,000 DWT General Cargo vessels at Kouan, with delivery due from the second quarter of 2016. Jiangzhou SY have taken an order for six MPPs, with a reported 500 TEU container capacity from a yet unknown German owner, with delivery throughout 2016.
On for LPG/Ethylene carriers, Navigator Gas have declared options for three further 35,000 CBM carriers at Jiangnan Shipyard for delivery in 2016, and taking the total series to four vessels", Clarkson Hellas concluded.
In a separate report, Shiptrade & Services noted that "bigger sizes sharing the driver’s seat In the newbuilding market, we have seen a total of 36 vessels to have been contracted this week, with owners’ attention mainly drawn by the bigger sizes in both the wet and dry segments. JES International has secured 2 massive orders, with the first one coming from “Vogeman” for 8 Newcastlemaxes and the second one from “Empire Bulkers” of Greece for 10+8 Capes. What could be described as eyecatching this week, was the price at which “Nissen Kaiun” seem to have placed their order for 3 Handysize bulkers at Shikoku in Japan. On the wet front, Sungdong in Korea has secured an order from “Eastern Pacific” for 2 Suezmaxes and 2 Aframaxes, with deliveries in 2016 and 2017, at $64 and $51 mill. Respectively", it concluded.
The scrapping pace is slower than last year but still at very good level; an average of 18 ships per week is recycled in 2014 compared to 22 ships per week in 2013:
India remains the world’s favourite demolition destination with 85 ships (37%) so far. It should be noted that for the first time since 2006, container ships are topping the demo-list. In total 55 container ships have been sold for scrap, or 24%.General Cargo ships closely follow with 54 units (23%), while tankers and bulkers follow with 45 and 44 units respectively.
During the course of the past, as per Shiptrade & Services, "performance in India has been impressive this week, with cash buyers offering very good numbers, something that, on the other hand, leads them to ask for unrealistic levels from local end buyers. Thus, owners that commit their units at very competitive prices, might end up with an unpleasant renegotiation headache by the time their vessels are ready to be beached. In Pakistan, it has been a quiet week, following the recent buying spree in the area, with the local market unable to compete with India, despite fundamentals remaining stable. The Bangladeshi market experienced levels that would not enable local players to compete with their sub-continent “rivals” and, as a result, bigger units ended up elsewhere, creating a need for local buyers to re-evaluate their options in order to step forward and claim their market share. In general, a softening in numbers is expected to come into the foreground, as both the monsoon season and the elections in India are in front of us. Add to this the budgets in Bangladesh as well as Pakistan, and there you have it. In Turkey, strong demand is there, while supply is relatively absent. As a result, we are seeing good levels being offered and end buyers acting quite aggressively. On the other hand, the Chinese market was quiet for yet another week, with activity focusing solely on state owned units sold to local yards, taking advantage of the subsidies offered", the shipbroker noted.
Meanwhile, newbuilding activity is still lagging behind the level observed during the first quarter, but as the Easter Holidays are now behind, orders are expected to pick up. According to the latest report by Clarkson Hellas Ltd., there were two order to report in dry this week. "Oldendorff have declared options for two further 208,000 DWT Newcastlemax at Taizhou CATIC. This takes Oldendorff’s total series at the yard to eight vessels, with delivery of the latest vessels in the last quarter 2016 and the second quarter of 2017. In the Handysize market, domestic buyer Xiamen Ocean Shipping has announced an order for five firm 38,300 DWT bulkers at Shanhaiguan, with delivery from 2016. In tankers, Sumitomo Heavy have taken an order for one firm plus one option 105,000 DWT Aframax from Finnish owner Lundqvist Rederierna, with delivery of both units in 2016. Just one order in the conventional container market with Shanghai International Port Group contracting four firm 1,020 TEU container carriers at Tsuneishi Zhoushan. Delivery of the vessels is split between 2016 and 2017. In the general cargo/MPP segment, Nanjing Ocean Shipping Co. (NASCO) contracted four firm 55,000 DWT General Cargo vessels at Kouan, with delivery due from the second quarter of 2016. Jiangzhou SY have taken an order for six MPPs, with a reported 500 TEU container capacity from a yet unknown German owner, with delivery throughout 2016.
On for LPG/Ethylene carriers, Navigator Gas have declared options for three further 35,000 CBM carriers at Jiangnan Shipyard for delivery in 2016, and taking the total series to four vessels", Clarkson Hellas concluded.
In a separate report, Shiptrade & Services noted that "bigger sizes sharing the driver’s seat In the newbuilding market, we have seen a total of 36 vessels to have been contracted this week, with owners’ attention mainly drawn by the bigger sizes in both the wet and dry segments. JES International has secured 2 massive orders, with the first one coming from “Vogeman” for 8 Newcastlemaxes and the second one from “Empire Bulkers” of Greece for 10+8 Capes. What could be described as eyecatching this week, was the price at which “Nissen Kaiun” seem to have placed their order for 3 Handysize bulkers at Shikoku in Japan. On the wet front, Sungdong in Korea has secured an order from “Eastern Pacific” for 2 Suezmaxes and 2 Aframaxes, with deliveries in 2016 and 2017, at $64 and $51 mill. Respectively", it concluded.