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23/5/2012

Fearnleys Weekly: 11 firm newbuilding contracts


GENERAL COMMENT
We report 11 firm newbuilding contracts over the past week in 4 different ship segments. Yangfan Group continues to secure Bulk Carrier orders, now latest 6 firm boxshaped handysize vessels designed by Deltamarin, contracted by d`Amico’s Irish branch. DSME has secured an order for 2 firm plus 6 optional 160,000 cbm LNG carriers from the Greece owner Almi Gas. The first 2 vessels are slated for delivery July and September 2014 and already fix on charter. The optional vessels are slated for delivery 2015 and 2016. HHI has received an order for 2 firm 6600 PCTCs from Eukor. This is the first order from Eukor since 2008, which operates about 60 vessels mainly transporting Korean export cars made by Hyundai.
ACTIVITY LEVEL
Tankers Dry Bulkers Others
Low Low Low
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
BC 6+6 39500 dwt Yangfan d`Amico Group 2014 22.3
LNG 2+6 160000 cbm DSME Almi Gas 2014-2016
MT 1 318000 dwt Universal Kyoei Tanker 2014
PCTC 2 6600 ceu HHI Eukor 2014

TANKERS

CHARTERING - Crude
There was steady activity in the MEG VLCC market since our last report and rates firmed slightly for East whilst remaining stable for West. Charterers, however, are now showing reduced interest for VLCC transportation to Asia, and as a result rates are again under downward pressure with older units securing cargoes at lower levels. With charterers now concentrating on second decade June cargoes after covering much of the first decade, they can afford to hold back cargoes for the moment in order to possibly achieve lower rate levels. The Atlantic VLCC market remains date sensitive, but it appears that there are more than enough ballasters from east of Suez to cover any interest charterers may have from WAF. There was rather less Suezmax activity seen in WAF with rates falling back into the low ws80s. The Suezmax market in the Med/Bsea also softened in the wake of the decline in rates and activity in WAF. There were few changes in Aframax rates for cross Nsea voyages with rate levels remaining more or less where they have been in recent weeks. Baltic rates also remained stagnant and we see little reason for them to change drastically in the near future. In the Med/Bsea Aframax availability was a bit tighter for prompt positions, but there are still some vessels around even though many are lacking some important oil company approvals; nonetheless, it doesn’t appear likely that we shall see any great shift in rate levels here. In the Caribs the Aframax market was softer with more than enough tonnage available.
CHARTERING - Product
On the back of stateside gasoline draws and a lack of larger tonnage on the Continent we are seeing firmer rates in the Atlantic basin, pushing rates up to ws152.5 for UKC/USAC basis 37kt, with a mildly bullish outlook. The LR1s are still in short supply with the going rate now firmer at ws120 for Baltic/USAC basis 60kt. We see rates holding firm for LR1s at least until the end of the month. The market is a bit different for the smaller vessels, which are facing limited activity. Handysizes have softened to ws140 basis 30kt, with Flexis stable at ws185 basis 22kt cross-UKC. The activity in the USG has picked up, resulting in firmer rates of ws82.5 USG/UKC-Med basis 38kt. The rates are still not high enough to keep a vessel ex New York from going south into the USG. The activity has picked up some but not enough to absorb the volume of available tonnage. We started the week with several ppt LR1s in the MEG which were quickly covered by charterers on forward positions which also resulted in further pressure on the rates. In the middle of the week we have seen rates dropped some 10 ws points from previous week and we expect further drop. On the LR2s rates seem to have reached its bottom at ws85 after the demand and supply have got well balanced. Moving cargoes direction west seems like a sad chapter as only few fixtures have got confirmed in both the LR1 and LR2 segment, with rates well below previous week’s levels. In the MR market in the east we have not seen much changes at all over the last weeks or months, and owners and charterers seems to have “agreed” the rates for 2012. Ws130 is still being done for Far East destinations basis 30,000 mt.
ACTIVITY LEVEL
VLCC Suezmax Aframax P. E. of Suez P. W. of Suez
Stable Weakening Soft Weak Firming
RATES
DIRTY (Spot WS) This
week		 Last
week		 Low
2012		 High
2012
MEG / West VLCC 39.0 39.0 31.0 45.0
MEG / Japan VLCC 57.5 56.0 48.0 70.0
MEG / Singapore 260,000 58.0 57.0 48.0 72.5
WAF / USG 260,000 60.0 65.0 56.5 70.0
WAF / USAC 130,000 82.5 97.5 64.0 97.5
Sidi Kerir / W Me 135,000 80.0 90.0 65.0 110.0
N. Afr / Euromed 80,000 82.5 95.0 80.0 127.5
UK / Cont 80,000 95.0 82.5 82.5 110.0
Caribs / USG 70,000 117.5 127.5 95.0 140.0
CLEAN (Spot WS)
MEG / Japan 75,000 85.0 87.5 82.5 97.5
MEG / Japan 55,000 105.0 117.5 97.5 125.0
MEG / Japan 30,000 130.0 130.0 105.0 130.0
Singapore / Japan 30,000 130.0 130.0 115.0 130.0
Baltic T/A 60,000 120.0 110.0 95.0 135.0
UKC-Med / States 37,000 152.5 140.0 132.5 190.0
Caribs / USNH 38,000 122.5 120.0 120.0 185.0
1 YEAR T/C (usd/day) (theoretical)
VLCC (modern) 21,500 21,500 17,000 22,000
Suezmax (modern) 16,500 16,500 15,000 16,500
Aframax (modern) 13,000 13,000 12,500 13,500
LR2 105,000 13,500 13,500 13,500 13,750
LR1 80,000 12,750 12,750 12,500 13,500
MR 47,000 13,750 13,750 13,500 13,750
VLCCs fixed all areas last week:  48 previous week:  47
VLCCs avail. in MEG next 30 days:  95 last week:  91
(incl. vessels on subjects excl Tankers UK and Frontline)


SALE AND PURCHASE
Vessel Size Built Buyer Price Comm.
Hero I 308 571 1999 Sentek 26,00
Apollo 16 259 995 1985 Wirana 16,00
Raffles River 107 113 2004 Greek 42,50 Enbloc
Temasek River 107 113 2005

DRY BULK

CHARTERING - Handy
Supra market continued with the same pace as last week. Skaw/Passero deliveries fixed towards US Gulf were paid around USD 5k, while US Gulf fixtures concluded tick below USD 24k for UK/Cont direction. Fronthauls was hovering around USD 19k p/d. Pacific market has been weak and falling due to lot of prompt available ships and lack of cargoes. For Indo-India, large eco Supra now fixed at USD 7k + BB USD 80k bss APS Indonesia. Nickel ore cargoes are not seen in market anymore due to on-going Indo ban which has again taken away cargoes and putting pressure on market. Nopac also fixed under USD 9k dop Japan. Indian iron ore market remains quiet with less activity on WCI & ECI. WCI-China rates around USD 10k and ECI-China around USD 7k. Some ECI Supras have been ballasting to pick up Indo cargoes as well. RBCT rv fixed at APS USD 11k + BB USD 350k. Red Sea fertilisers to India are fixed high teens. Not much activity seen on short period and rates around USD 10k for large Supra.
CHARTERING - Panamax
Last week ended with a bullish sentiment from owners with predictions of tight supply for Atlantic tonnage. This took a turn this week with an extremely slow Monday, low activity and a growing list of available ships in the Atlantic. Owners are gradually willing to look at fronthaul as Atlantic is weakening. The indices have slowly been declining, but the general sentiment is even more bearish than the indices reflect assisted by a falling forward curve. Despite more coal cargoes out of USG and USEC for direction India/Feast and the Continent, the number of ships is outnumbering the cargoes. The Tarv’s are being fixed in region of USD 10-12k depending on duration and trade. In the Pacific we see the same tendency with rates slipping for all trades and a Pac round is now paying around USD 7.5k. The period market has somewhat vanished with little being done.
CHARTERING - Capesize
The number of ballasters is increasing and the Tubarao/Qingdao rates has been dropping steady throughout the week. Last done is USD 20 pmt, and it seems some owners are now prepared to face the sub 20 level for this trade. Furthermore, the ballasters from the Far East are to a larger extent competing with the Atlantic tonnage for USEC/St Lawrence cargoes. West Australia-China rates have been flat around the 7.70 mark whilst period activity is inactive but levels remaining around 12k for a year.
ACTIVITY LEVEL
Capesize Panamax Handysize
Low Slower Low
RATES
CAPESIZE (usd/day, usd/tonne) This
week		 Last
week		 Low
2012		 High
2012
TCT Cont/Far East (172' dwt) 26,300 28,200 19,500 43,000
Tubarao / R.dam (Iron ore) 8.40 9.10 7.90 12.70
Richards Bay/R.dam 8.10 8.30 8.10 11.00
PANAMAX (usd/day, usd/tonne)
Transatlantic RV 10,800 12,500 4,250 16,400
TCT Cont / F. East 18,450 17,500 13,950 23,900
TCT F. East / Cont 1,100 1,500   2,900
TCT F. East RV 7,450 8,250 4,950 12,300
Murmansk b.13-ARA 15/25,000 sc 8.50 8.80 6.95 10.15
Murmansk b.13-L.pool 15/25,000 sc 9.40 9.70 7.70 11.20
HANDYSIZE (usd/day)
Atlantic RV 14,675 13,250 5,000 15,100
Pacific RV 8,235 9,250 4,180 11,725
TCT Cont / F. East 19,000 18,500 11,500 23,400
1 YEAR T/C (usd/day)
Capesize 150,000 dwt 9,500 9,500 9,400 15,000
Capesize 170,000 dwt 12,000 12,000 11,000 17,000
Panamax 75,000 dwt 10,200 10,250 10,000 12,000
Handysize 53,000 dwt 10,750 11,500 10,000 12,250
Baltic Dry Index (BDI): This Week: 1100 Last Week: 1137


SALE AND PURCHASE
Vessel Size Built Buyer Price Comm.
Shinyo Erna 79 500 2012 Undisclosed 24,00
Xiao Xiao 76 098 2011 Chinese 24,00
3xSTX Jinhae 57 300 2012 European 24,30 Each Enbloc
Solar Asia 46 658 1998 Undisclosed 12,80
Sanko Royal 42 529 1995 Undisclosed 9,20
Apex Bulker 32 729 2003 Undisclosed 14,00
Eastgate 27 877 1990 Ukranian 5,70

GAS

CHARTERING
The Baltic VLGC freight index has been in red for a week, not really mirroring actuals, but most likely as a reaction to a less steamy cargo market and continued soft crude oil prices. The independent owners see no reason to put their freight targets down at this stage, nonetheless they would probably have to accept that spot rates have paused climbing and that a minor correction might slow earnings down further. There was always the risk that recent spot freight levels could attract relets from charterers in control of VLGCs, and we have seen a few offering/fixing freight deals and slightly lower numbers. The spot market ahead is in hands of the producers in the AG i.e. how many more June FOB cargoes will there be on the market that need spot freight? Will the healthy output we saw in April and May continue? If so, we dare say that the VLGC spot market is saved for a few more weeks although there surely will be some corrections and bumps both up and down.
ACTIVITY LEVEL
COASTER 15-23,000 cbm 82,000 cbm
Moderate Slow Low
RATES
SPOT MARKET (usd/month***) This
week		 Last
week		 Low
 High
82.000 cbm / FR 1,320,000 1,350,000 185,000 1,350,000
57.000 cbm / FR 950,000 900,000 725,000 950,000
35.600 cbm / FR 850,000 850,000 750,000 875,000
20.000 cbm / SR* 790,000 790,000 740,000 800,000
10.000 cbm ETH** 600,000 600,000 580,000 620,000
6.500 cbm / SR 480,000 490,000 470,000 520,000
COASTER Europe 315,000 335,000 245,000 345,000
COASTER Asia 237,500 237,500 235,000 240,000
* 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 135,000 135,000 105,000 150,000
West of Suez 138-145'cbm 140,000 138,000 110,000 150,000
1 yr TC 138-145'cbm 155,000 155,000 148,000 158,000


LPG/FOB prices (usd/tonne) Propane Butane ISO
FOB North Sea / ANSI 816.50 936.00  
Saudi Arabia / CP 810.00 895.00  
MT Belvieu (US Gulf) 471.77 727.29 829.78
Sonatrach : Bethioua 815.00 940.00  


Source: Fearnleys Weekly

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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