The tough financing and market conditions, combined with a more than challenging macroeconomic environment have begun to take their toll in the newbuilding market, with both ship owners and shipyards' earnings performance being dubbed as below par. In its latest weekly report, Clarkson Hellas mentioned that "the newbuilding market continues to operate within the confines of a tough Macroeconomic environment. This has been highlighted this week by various Owners, with interests across the tanker, container and car carrier sectors, reporting first half losses Y-o-Y. This, in tandem with the similarly subdued earnings being posted by the yards for the same period, continues to highlight the challenging trading environment within which the market is operating" said Clarkson Hellas.
It added that "the Korean MKE (Ministry of Knowledge Economy) has stated ‐ that for the first time in the past 19 years, they expect the export value of ships and structures for Korea will decline in 2012, which seems unsurprising given the challenges of the debt market at present, which of course makes investment in the newbuilding market somewhat tough to say the least.
That said, there have still been reports of new business being concluded this week, with the yards
proving that economical designs are key to winning new business and it will be those Owners who have cash available for pre delivery instalments, going to be the ones benefiting in the charter market once these ships hit the water" it said.
Concluding its analysis, Clarkson Hellas noted that with Hamburg hosting the biennial SMM shipbuilding/ship equipment/machinery international trade fair, shipyards and equipment suppliers from across the world are converging to present their product ranges not only to the German Owners based there, but the global market as a whole. "Whilst the German KG market remains depressed at the moment the traditional German Owners and KG managers are fully aware of the benefits of the new designs. In the container space, to name but one sector, they have been influential in working with the yards in developing their new designs, that will allow the segment to further strive towards meeting the new regulations for NOX/SOx reductions as well as make substantial savings on their future fuel bills" the researched said.
Meanwhile, in a separate weekly report, shipbroker Golden Destiny said that "in the newbuilding market, the ordering activity keeps very soft from last week’s ordering volumes with again less than 20 number of units ordered and a weak sentiment for the newbuilding demand for the rest of the third quarter and the forthcoming fourth quarter of the year. The orders reported in the dry bulk carrier and tanker segments this week is mainly for small sized vessels, handysize dry bulk carriers and MR tankers compared with last week’s orders for bigger sized vessels, capesize unit in the bulk carrier segment and very large crude carriers in the tanker segment. Offshore vessel types are still of utmost importance in the newbuilding market as a vital business for the profitability of shipyards" Golden Destiny mentioned.
According to the report, overall, the week closed with 13 fresh orders reported worldwide at a total deadweight of 603,600 tons, posting no weekly change with bulk carriers’ newbuilding business keeping the lion share 62% of this week’s total volume of newbuilding contracts. At similar week closing in 2011, the newbuilding business was up by 70%, when 22 fresh orders had been reported with 10 contracts in the bulk carrier segment, 4 in the tanker and 8 in the offshore. In terms of invested capital, the total amount of money invested is estimated at region $322 mil with 15% of the total number of orders being reported at an undisclosed contract price. The container segment attracted a firm amount of invested capital of about $160mil for sub-panamax units, while the offshore keeps a steady pace of investments with contracts of a high value per week.
"In the bulk carrier segment, Wilmar Holdings of Singapore ordered two handysize units of 35,800dwt for construction in Qingshan Shipyard of China at a price of $22,5mil each for delivery in 2013-2014. In addition, Taiwanese dry bulk player, Wisdom Marine, has placed an order for four 34,000dwt handysize vessels in Namura Shipbuilding for a price in the region of $21mil each with delivery for the first two units in the second half of 2014 and the other pair in the first half of 2015. Wisdom stated that is aware that the same units for construction in a Chinese yard are costing less than $20mil, but they prefer the Japanese yard due to their longestablished relationship. In the kamsarmax segment, Chinese shipbuilder Jinhai HI in Zhejiang has won a contract from Japan’s Nisshin Shipping for two 82,000dwt units, with an option for two more, under a new energy efficient eco-friendly design" the report said.
In the tanker segment, Pyxis Shipmanagement of Greece has ordered a MR 52,000dwt unit in SPP Shipbuilding of South Korea for a price $33mil with delivery in 2014. In the container segment, Pacific International Lines of Singapore ordered four boxship units in the small panamax segment of 3,800 TEU in Dalian Shipbuilding for a price in the region of $40mil each with delivery in 2014-2015. In the offshore segment, Malaysian shipbuilder Nam Cheong has secured three contracts of $43,8mil for one platform supply vessel and two anchor handling towing supply vessels. The two AHTS are from established customers in Norway and Middle East, while the PSV contract is a breakthrough deal for Nam Cheong from a new customer, who is an emerging offshore marine services and construction company based in West Africa. In addition, Floatel has contracted for a fourth accommodation semisubmersible at Keppel FELS for $315m, confirming a letter of intent signed in March. The new generation harsh environment semi-submersible will be built to the Floatel Superior design, a DSS 20NS design developed by GustoMSC and Keppel FELS' Deepwater Technology Group. The platform is set to be delivered in early 2015 and will be able to accommodate 440 in single bed cabins. Daewoo Shipbuilding & Marine Engineering (DSME) has won a $1.96bn order to build five fixed platforms for a customer in Africa. The units are scheduled for delivery by April 2016. This is the first offshore order since DSME's first contract for a floating LNG plant in June. The shipbuilder has previously said that it expects to boost orders for offshore equipment by 34% this year to $8.5bn" Golden Destiny concluded.