Uncertainty Reigns in Newbuilding Sector

Press Release
Monday, January 28, 2013

Uncertainty still reigns true in the global shipbuilding sector with many factors influencing either a return to ordering activity or a continuation of the reduction in interest in newbuildings.

 


“The best case scenario for shipbuilders is for ship finance liquidity to return and for a cut in Chinese overcapacity. There needs to be renewed interest in eco-designs and ships with options such as LNG or Ballast Water Treatment Systems and then possibly any increased demand will support pricing from the shipyards’ point of view,” said Mark Williams, Research Director at Braemar Seascope.


The worst case scenario is for a continuation in the global credit crunch; weak freight markets continuing to suppress newbuilding demand; input costs and forex turning against the builders; the low point in the contracting cycle extending and also more cash flow problems and failures.


“Investors are unlikely to invest in new tonnage this year without a fair prospect of economic return even if there is a short term recovery in freight markets, with many believing more needs to be done to encourage a return in confidence in the newbuilding sector,” Mr Williams told delegates attending the latest Marine Money conference.


While higher scrap prices should encourage owners to renew their fleets, the ongoing credit crunch and weak freight markets are reducing the economic life of today’s ships, which are now depreciating to scrap value in their teenage years or early twenties.


Mark Williams said that newbuilding prices tended to follow demand with input costs only providing a floor which can be broken through. “When the global shipbuilding backlog is less than about 18 months, yards tend to cut prices for competitive advantage, however prices appear to be bottoming out. There is far too much shipbuilding capacity out there. 2012 was the peak delivery year since the mid-1970s. So it is a question of who will blink first.”

Maritime Reporter September 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Shipbuilding

Rederij Groen Takes Delivery of 7-Waves

Rederij Groen’s entire SRSV fleet built by Damen Maaskant Shipyards Stellendam. Dutch offshore services company Rederij Groen has taken delivery of the 7-Waves,

De Beers Orders Specialized Ship from Kleven

Kleven signed a contract with diamond company De Beers Marine Namibia, part of De Beers Group, on the building of a highly specialized vessel for deep water mineral exploration.

FMT Options for another Towboat from Eastern

Eastern Shipbuilding Group, Inc. announce that Florida Marine Transporters, Inc. of Mandeville, La. exercised another additional 90’x32’x10’ “Canal Class” Inland

News

WFW Advises ING Bank on $340m Loan Facility for Euronav

Watson, Farley & Williams (WFW) has advised ING Bank N.V. (ING) as sole bookrunner and facility agent for a syndicate of banks on a $340 million loan facility made available to Euronav NV.

UN Authorizes Ship Inspections Near Somalia For Arms, Charcoal

The United Nations Security Council authorized the inspection of boats suspected of carrying illegal shipments of charcoal or weapons to and from Somalia on Friday,

Clean Marine Wins New Contract

Clean Marine has been selected by Hyundai Mipo Dockyard in South Korea to supply exhaust gas cleaning systems (EGCS) for two new MR tankers. IMO’s convention

Ballast Water Treatment

Interferry Applauds IMO Consideration of BWTS Exemption

Interferry has praised a decision made at last week’s meeting of the IMO Marine Environment Protection Committee (MEPC) that could exempt certain ferry operators

MEPC Makes Progress on Energy Efficiency, Emissions

The Marine Environment Protection Committee (MEPC) of the International Maritime Organization (IMO) met for its 67th session from October 13-17, 2014, at IMO Headquarters in London.

Bright Outlook for BWM Convention

The Danish Maritime Authority informed that the Ballast Water Management Convention is now one step closer to ratification following last week’s meeting of United

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Naval Architecture Navigation Pipelines Pod Propulsion Ship Simulators Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1172 sec (9 req/sec)