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Home > News > Industry News
Newbuilding activity grinds to a halt

Browse:2444

From:ASB

Time:2016-03-31

Easter Holidays for a large part of Europe and a general lack of demand has pushed newbuilding ordering activity to new lows, as shipbrokers noted very limited moves again this past week, apart from a couple of small product tanker orders. In its latest weekly report, shipbroker Allied Shipbroking said that “the difficulties have now been reflected across the board in prices being quoted for all size groups and ship types. Rumors are now circulating that there are numerous newbuildings fully completed and waiting delivery but owners are frantically trying to back out from paying the final (heavy tail) payments and accepting delivery of these vessels. This adds to the already long list of woes that shipbuilders are plagued with, while they try helplessly to find some sort of balance in their cash flows. With numerous shipbuilders hanging on a thread, there is a strong sense in the air that we will be seeing a large number of restructuring deals and M&A activity over the next couple of months. This restructuring, if and when it takes place, will likely be fairly painful for most, while a keen eye will be placed on what will happen to the current orderbook and to what extent we will see a strengthening of the slippage/cancelation rate emerge from these developments alone”, said Allied in its report.

Meanwhile, on a separate newbuilding market, Clarkson Platou Hellas said that “having been under discussion for some time, China Merchant Group has now announced an order for ten firm 400,000 DWT VLOCs across three domestic yards. Four vessels will be built at Shanghai Waigaoqiao Shipbuilding (SWS), another four vessels will be built at Qingdao Beihai Shipbuilding and the remaining two will be built at their own yard, China Merchants Heavy Industry (Jiangsu). The vessels are set to deliver throughout 2018 and 2019 and are backed by long-term COA to with Vale – with discussions ongoing for further newbuildings for the same end user across various other Chinese yards. There is another order to report from China, with CSC Jiangdong receiving an order from Ningbo Dayu Shipping for six firm 9,800 DWT General Cargo Vessels. It is understood that first vessel will be delivered within 2017 and the last vessel within 2018”, Clarkson Platou Hellas concluded.

In the S&P market, “on the dry bulk side, activity continues to hold firm, with rumors now circulating that there is an increasing appetite emerging from investors driven by the relatively low prices being seen in the modern tonnage range in all size groups. That’s not to say that prices aren’t noting further drops, while expectations are for notable price drops to be witnessed in the resale to 5 year old range, largely thanks to the drop in newbuilding prices noted of late. On the tanker side, interest was still mainly holding in the product tanker segments, with sentiment holding more bullish on these segments rather then on the larger crude oil carriers. This has been something reflected in secondhand prices, as the lack in strong buying interest and the fairly ample supply of sales candidates compared to this buying interest has been pushing price ideas down over the past couple of weeks”, Allied Shipbroking said.

Finally, on the demolition market, Allied said “despite some volatility in the market this past week, the market seemed to have overall kept its strength in terms of pricing, with a number of reported sales showing fairly firm price offerings. The drop in steel plate prices was being reported early last week though end buyers were showing a strong sense of competition pushing up levels especially for high ldt-high spec units. Sellers seemed to have also played a role here as well, having entered the market with a stronger confidence as to the market’s capacity, thanks to the quick improvement in price noted a couple of weeks back, pushing to keep the levels as high as they could. Ass such the week ended with an essence that prices were holding at their current levels and even showing a slightly positive trend. It will be interesting nevertheless if this trend will follow through during the next couple of days or if it will collapse under pressure brought on by end buyers”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide


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