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Monday, August 10, 2009

Global new ship order in July hits over 6.3 million DWT

Monday, 10 August 2009

Encouraged by the latest positive news on the world economy and its prospects of rebounding, ship owners have been returning to the new building foray lately. The latest figures compiled by leading shipping researchers Clarskon, showed that the world wrote down over 6.3 million DWT of new ship orders in July 2009, far larger rebound after May 2009, 1.2 times as much as the total amount in January to June 2009 period or 2.4 times more than that in June 2009.
China took up 70% and beyond of the global quantity, including 4.12 million DWT of orders undertook by Zhoushan Jinhaiwan Shipyard Co Limited and some 0.5 million DWT of orders by shipbuilders in Zhejiang and Taiwan. China Association of National Ship Industry released that the country signed 41 new ship orders, adding up to 4.7 million DWT, which were a bit more than the collected amount by Clarkson.
In addition, some experts from CANSI said that "June and July new ship orders are special cases. It needs further observation to judge whether ship industry will continue the upturn."
On the opposite end, that of scrapping older vessels, a total of 591 ships with a capacity of 18.5 million tons have been scrapped during the period from January to July this year, according to shipbrokers N.Cotzias, numbers which are 300% higher than the relative period of last year, when a total of 140 ships with a capacity of 4.8 million tons had been scrapped. Still, analysts have been indicating that these figures may just not be enough, in order for the market to regain its balance between tonnage supply and demand. Hellenic ship owners have been the most active thus far through the year, selling for scrap a total of 102 ships of various types. Second place is occupied by the Chinese with 66 ships leaving the global fleet, with the Japanese taking third place with 51 ships, followed by Indian ship owners who sold 31 ships for demolition said Cotzias. From the total of 591 ships, 200 were dry bulk carriers, 216 containerships, 71 were tankers, 19 were reefers, while the remaining 84 were passenger carriers and RO/ROs.
Market sources told Hellenic Shipping News that charterers prefer cheaper to hire ships, which means they are turning towards older vessels. Also, the market lacks of ships on the 20-25 year segment, which as a result has triggered demand for the 25+ year old bulkers. This demand means that each time the market is on an upward trend, owners are keen on employing their old ships, instead of scrapping them. In fact, there have been numerous reports of ships which were headed for demolition yards, but as the market returned to higher grounds they were recomissioned. This explains in part the small number of ships scrapped in June, i.e. a month when dry bulk rates reached their 2009 highs.
Nevertheless, demolition numbers need to become even higher in the future. This is because, as market observers are reporting, the deliveries of newly built vessels have been picking up lately. Thankfully, as figures from SSY show (until June), the balance between the global fleet’s additions (deliveries) and deletions (demolitions) was just two vessels. In other words, after taking into account all ships of all types which entered (202 in total) and left the fleet (200), just two vessels were added. The Handysize segment was left with 85 ships less from the beginning of the year until the end of May, with 55 additions and 140 deletions. This is expected to change soon, given that many yards are now picking up their pace of deliveries, a process which will intensify as the year nears to its end. At the same time, cancelled contracts don’t necessarily mean that the respected vessels won’t be built.