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28/3/2012

Fearnleys Weekly: 15 newbuildings contracted over past week


GENERAL COMMENT
We are reporting 15 vessels contracted over the past week, whereas 8 of these vessels are LPG carriers in the size range 4,500 - 6,500 cbm. Japanese yards have in the past dominated construction of small LPG carriers. However, due to the strong yen the Japanese yards are now facing tough competition from China and South Korea also in this segment. We do expect to see more LPG orders in the time to come also for larger Midsize and VLGC tonnage.
ACTIVITY LEVEL
Tankers Dry Bulkers Others
Low Low Moderate
Average Far Eastern Prices
PRICES
PRICES (mill usd) This
week		 Last
week		 Low
2012		 High
2012
VLCC 300'dwt USD 94.0 m USD 94.0 m 94.0 97.0
Suezmax 150'dwt USD 60.0 m USD 60.0 m 60.0 62.0
Aframax 110'dwt USD 50.0 m USD 50.0 m 50.0 52.0
Product 47'dwt USD 34.5 m USD 34.5 m 34.5 36.0
Capesize 180'dwt USD 50.0 m USD 50.0 m 50.0 50.0
Panamax 76'dwt USD 29.0 m USD 29.0 m 29.0 30.0
Handymax 56'dwt USD 27.5 m USD 27.5 m 27.5 28.0
Prices are based on payment terms 40/60
NEWBUILDING CONTRACTS
Type No Size Yard Owner Del Mill$ Comm
CO 6 2200 teu Guangzhou Wenchong Lomar 2014
Ethylene 2 4500 cbm Avic Dingheng Anthony Veder 2014 22
LPG 2+2 5000 cbm STX Vafias 2013-14
LPG 2+2 6500 cbm STX Vafias 2013-14
LPG 2+2 5000 cbm STX Brave Maritime 2014 19.8
MT 1 52000 dwt HDM Scorpio 2013 36

TANKERS

CHARTERING - Crude
The VLCC market rebounded quickly after last week’s dip in rates. The catalyst initiating this rebound was the result of a number of vessels missing cancelling dates and a poor selection of tonnage in relatively prompt positions available to charterers. This state of affairs prompted charterers to seek coverage for 2nd decade cargoes adding further fuel to the fire. The challenge for charterers is to hazard a guess as to the real size of the tonnage list in a market where it has become clear that owners are not showing all of their positions and where it is likely that the ‘official’ tonnage list is probably somewhat shorter than the real list. With the Atlantic VLCC market still very active and firm, hardly any VLCCs now choose to ballast to the MEG, and this also gives a boost to VLCC owners trading their vessels in the MEG. WAF Suezmax rates have now dipped in the wake of last week’s rally. This was largely due to a more than adequate tonnage list enabling charterers to pick and choose vessels at their leisure. A similar situation prevailed for Suezmaxes in the Med/Bsea where weakening rates prevailed. Nonetheless, we think it likely that the Suezmax market has now reached the bottom of the current rate cycle. We experience a two-tier market for Nsea/Baltic Aframaxes. Whilst cross Nsea remain at around ws90 level, the introduction of Ust Luga cargoes from the Baltic created an upward pressure on rates as few vessels were available to cover the early April stems. In the Med/Bsea charterers found themselves once again in the driver’s seat since the tonnage list was more than adequate to cover what the market had to offer in terms of cargoes; rates dropped from last week’s levels and the current state of play indicates that they could soften even further. The market was quite balanced for Aframaxes trading in the Caribs, and hence, it is expected that rates will remain more or less around current levels.
CHARTERING - Product
Rates are still under pressure across the board for all ship sizes on the Cont. MRs trading TA have been pushed down to ws135 for UKC/USAC basis 37kt, and the mogas arbitrage is currently closed. Tonnage availability isn’t all too bad so a bottom in the market seems near. For the vessels is looks more dire with a very long list of ships and in combination with almost no deals being done the rates are even further depressed to the ws110 level for Baltic/USAC basis 60kt with a bleak outlook in the short term. A small uptick seen in NWEurope tramper was short lived and Handy- and Flexisizes are soft again ws160 basis 30kt, and ws205 basis 22kt. Plenty of cargoes ex USG are still heading for S.America, keeping the fixing activity high and rates firm. We see the backhaul leg remaining firm for the time being with rates around the ws120 level basis 38kt with steadily firm outlook. There has been little movement for LRs trading East of Suez. The market remains stable at low rate levels, and considering the absence of long haul cargoes to clear out excess tonnage, the song remains the same. LR1s are fixing at ws102.5 for MEG/JPN voyages basis 55kt, and rates for voyages MEG/UKC are still estimated to USD 1.7m basis 65kt. The LR2s still experience close to zero returns, fixing at ws83.5 for voyages MEG/JPN basis 75kt. We expect rates to remain stable at this level in the foreseeable future. Rates for MRs trading SPORE/JPN are estimated to about ws122.5 basis 30kt, and MRs trading MEG/JPN see rates around ws115 basis 35kt.
ACTIVITY LEVEL
VLCC Suezmax Aframax P. E. of Suez P. W. of Suez
Firm Weakening Mixed Soft Soft
RATES
DIRTY (Spot WS) This
week		 Last
week		 Low
2012		 High
2012
MEG / West VLCC 40.0 37.5 31.0 40.0
MEG / Japan VLCC 68.5 63.0 48.0 68.5
MEG / Singapore 260,000 69.0 64.0 48.0 69.0
WAF / USG 260,000 65.0 70.0 56.5 70.0
WAF / USAC 130,000 77.5 92.5 72.5 92.5
Sidi Kerir / W Me 135,000 80.0 95.0 75.0 110.0
N. Afr / Euromed 80,000 90.0 102.5 80.0 127.5
UK / Cont 80,000 90.0 97.5 85.0 110.0
Caribs / USG 70,000 100.0 125.0 97.5 140.0
CLEAN (Spot WS)
MEG / Japan 75,000 83.5 82.5 82.5 90.0
MEG / Japan 55,000 102.5 100.0 97.5 107.5
MEG / Japan 30,000 115.0 112.0 105.0 120.0
Singapore / Japan 30,000 122.5 122.0 115.0 123.0
Baltic T/A 60,000 110.0 115.0 110.0 135.0
UKC-Med / States 37,000 135.0 145.0 135.0 190.0
Caribs / USNH 38,000 157.5 160.0 120.0 185.0
1 YEAR T/C (usd/day) (theoretical)
VLCC (modern) 20,000 20,000 17,000 20,000
Suezmax (modern) 16,000 16,000 15,000 16,000
Aframax (modern) 13,500 13,500 12,500 13,500
LR2 105,000 13,500 13,500 13,500 13,750
LR1 80,000 12,500 13,000 12,500 13,500
MR 47,000 13,750 13,750 13,500 13,750
VLCCs fixed all areas last week:  51 previous week:  50
VLCCs avail. in MEG next 30 days:  65 last week:  75
(incl. vessels on subjects excl Tankers UK and Frontline)


SALE AND PURCHASE
Vessel Size Built Buyer Price Comm.
Champion Power 105 083 1999 Greek 13,80
High Prosperity 48 711 2006 D'Amico 22,50

DRY BULK

CHARTERING - Handy
Atlantic market kept more or less stable throughout last week, with fresh cargoes able to short the list of idle ships. Cont/US Gulf fixed tick above USD 4k, while US Gulf/Cont paid close to USD 17,500. Fronthauls hovering around USD 14,400 per day. Pacific market has remained quiet but steady. For Indo-India, large eco Supra can fetch close to USD 22k basis APS Indonesia . Premium cargoes like nickel ore are also seen fixed at USD 13k dely North China. Nopac fixed around USD 11k dop Japan. Indian iron ore market remains quiet with less activity on WCI & ECI. WCI-China rates around USD 11k and ECI-China around USD 8k. Some ECI Supras have been ballasting to pick up indo cargoes as well. RBCT rv fixed at APS USD 13k + BB USD 400k. Red Sea fertilisers to India are fixed high teens. Not much activity seen on short period and rates are around USD 12k for large Supra.
CHARTERING - Panamax
The Panamax market had a slow week with owners struggling to find employment for their vessels. With a scarce amount of requirements in the market, and the ECSA cargoes still being the main driver. Decent rates can still be achieved, and we’ve seen vessels fixing 17k+ 685k for trip to the F.East on an APS ECSA basis. Limited activity in the east with few fixtures reported. The amount of open tonnage is increasing, however rates are still stable and north Pacific RV’s are paying around USD 8k daily for vessels delivering in North China. Aussie/China is fixing around USD 7k, and Indo rounds around USD 8-8.5k. India/China is fixing around USD 13K. In the Atlantic, Baltic rounds were reportedly fixing at USD 8k. A few TA fixtures were reported, but little emerged regarding the rates achieved by owners. Seems USEC and USG requirements are covered on an aps basis and USD 10k + USD 325k was reported for a vessel performing a trip from USG with redelivery in the Mediterranean. 2 laden legs in Atlantic is paying somewhere around USD 8-9k daily. Front hauls are giving decent returns with an LME reported fixed for a trip to China at USD 17,250 with delivery passing Gibraltar. The period market experienced lack of activity but a Kamsarmax was reported fixed for 4/6 months at USD 10,250 with delivery in the Far East.
CHARTERING - Capesize
Although spot fixing has increased significantly over the last week, it is worthy of notion that same has had little or no effect on levels paid. Major miners have booked numerous prompt units for both WAust and Brazil, but with an extremely overtonnaged market there is always another unit ready and keen to accept last done. The overall trend is drifting ever closer to zero for operators - and already negative value for head owners. With expensive bunkers combined with no short-term hope of improvement, an overwhelming number of ships now pile up around Singapore instead of ballasting towards the west. Softening paper levels are hurting period activity/rates - recent fixtures including 173kdwt/blt 2007 China mid April done for 11-13 months at USD 11k.
ACTIVITY LEVEL
Capesize Panamax Handysize
Active Slower Low
RATES
CAPESIZE (usd/day, usd/tonne) This
week		 Last
week		 Low
2012		 High
2012
TCT Cont/Far East (172' dwt) 21,000 22,000 19,500 43,000
Tubarao / R.dam (Iron ore) 7.90 8.20 7.90 12.70
Richards Bay/R.dam 8.20 8.50 8.20 11.00
PANAMAX (usd/day, usd/tonne)
Transatlantic RV 7,300 6,800 4,250 13,800
TCT Cont / F. East 17,000 16,900 13,950 23,900
TCT F. East / Cont 825.00 785.00   2,800
TCT F. East RV 8,000 7,900 4,950 9,900
Murmansk b.13-ARA 15/25,000 sc 7.80 7.70 6.95 9.45
Murmansk b.13-L.pool 15/25,000 sc 8.60 8.55 7.70 10.35
HANDYSIZE (usd/day)
Atlantic RV 10,750 9,650 5,000 15,100
Pacific RV 11,650 11,725 4,180 11,725
TCT Cont / F. East 14,470 14,000 11,500 23,400
1 YEAR T/C (usd/day)
Capesize 150,000 dwt 9,500 10,000 9,500 15,000
Capesize 170,000 dwt 11,000 11,000 11,000 17,000
Panamax 75,000 dwt 10,500 10,500 10,000 12,000
Handysize 53,000 dwt 12,250 12,250 10,000 12,250
Baltic Dry Index (BDI): This Week: 922 Last Week: 896


SALE AND PURCHASE
Vessel Size Built Buyer Price Comm.
HHI Resale 179 100 2012 Tsakos 44,00 Novation terms
Rongsheng Resale 176 000 2011 Zodiac 37,00 Under negos
Mining Star 76 225 2005 Undisclosed 21,50 Under negos
Energy Prometheus 74 083 1998 Undisclosed 13,00
Epanorthosis 73 630 2004 Korean 20,30
Silver Mey 68 676 1989 Chinese 6,80
Forest Princess 51 152 1998 Undisclosed 8,40 Woodchip

GAS

CHARTERING
Over the last week the VLGC market lost quite a bit of the energy we saw a week ago, and the activity level basically came back to where it was earlier in the month. The Baltic VLGC index seems to have reached the bottom level in the current cycle and has after nearly one month of daily decreases turned the opposite way over the last couple of days. As we have written in this column before, the recovery from the bottom of the curve to a healthy level is going to take some time as the supply of vessels looks more than ample in the short term. We count nearly 20 vessels in the AG between now and the middle of April. The latest market fixtures in the East returned not much more than USD 10/11k per day on a modern VLGC at current very high fuel prices and calculated on service speed. It is worthwhile to comment that most owners tend to reduce speed/save fuel and thereby optimize net results somewhat. In the western hemisphere LGCs and VLGCs are kept much busier and the returns are considerably higher than in the East.
ACTIVITY LEVEL
COASTER 15-23,000 cbm 82,000 cbm
Firmer Moderate Slower
RATES
SPOT MARKET (usd/month***) This
week		 Last
week		 Low
 High
82.000 cbm / FR 330,000 330,000 185,000 410,000
57.000 cbm / FR 925,000 900,000 725,000 925,000
35.600 cbm / FR 875,000 875,000 750,000 875,000
20.000 cbm / SR* 790,000 790,000 740,000 790,000
10.000 cbm ETH** 620,000 620,000 580,000 620,000
6.500 cbm / SR 500,000 500,000 470,000 520,000
COASTER Europe 335,000 300,000 245,000 335,000
COASTER Asia 240,000 240,000 235,000 240,000
* 20,000 cbm s/r reflects average spot market, LPG and Petchems (segment 15,000 / 23,000 cbm)
** 10,000 cbm eth reflects average spot market, Petchems and LPG (segment 8,200 / 12,500 cbm)
*** Excl. waiting time, if any


LNG
SPOT MARKET (usd/day) This
week		 Last
week		 Low
 High
East of Suez 138-145'cbm 121,000 121,000 120,000 150,000
West of Suez 138-145'cbm 125,000 125,000 125,000 150,000
1 yr TC 138-145'cbm 155,000 152,500 148,000 158,000


LPG/FOB prices (usd/tonne) Propane Butane ISO
FOB North Sea / ANSI 1104.00 1004.50  
Saudi Arabia / CP 1230.00 1180.00  
MT Belvieu (US Gulf) 668.18 874.29 977.60
Sonatrach : Bethioua 1160.00 1100.00

Source: Fearnleys

Shipbuilding News

In addition to the announcement covering three newbuilding units made by Ultrabulk on March 19th, Ultrabulk now confirms having added five further units to its long term fleet.The new units are one additional 61,000tdw Supramax bulker to be built at a Japanese yardand scheduled for delivery 2016, joined by another 81,000tdw Kamsarmax bulker for delivery in 2015.
Chinese-based Yangzhou Guoyu Shipbuilding Co., Ltd (YGS) has secured an order from Norwegian shipowner Axel C. Eitzen for the construction of up to nine handysize dry bulk carriers.
The Board of Directors of COSCO Corporation (Singapore) Limited today announced that COSCO (Dalian) Shipyard Co . Ltd., a subsidiary of the Company’s 51% owned subsidiary, COSCO Shipyard Group Co. Ltd., has secured a contract valued over RMB500 million (approx $81.5 Mln) from a Chinese ship owner to build one 28,000 CBM LNG Vessel.
Korea's Daehan Shipbuilding, managed by compatriot giant shipbuilder, Daewoo Shipbuilding & Marine Engineering, has been assigned to build newbuilding LR2 product carriers for Scorpio Tankers.
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