special feature - hellenic shipping news

www.intermodal.gr

Issue: December 2014

Research & Valuations Dept. [email protected]

Analysts:

Ms. Eva Tzima

+30 210 629 3320 [email protected] Mr. Vassilis Logothetis

+30 210 629 3329 [email protected]

Secondhand Market Total vessels sold this month: 117

SnP activity in December sustained its levels from the previous month. Despite the

fact that holidays together with additional pressure on the freight market, in the

case of dry bulkers, were expected to slow down the number of transactions to-

wards year end, it seems that interest for second hand tonnage remains firm, while

the gap created by the pull back in bulker sales was filled by the transactions that

took place in the tanker sector.

Newbuilding Market Total new orders placed this month: 120

Activity in the newbuilding front slowed down last month, with tanker orders making

up for the decreased number of bulker orders here as well. A first assessment for

the newbuilding market in 2014 is that the fall in activity has been dramatic, which

comes as no surprise given the fact that over at the dry bulker side, where most

orders of conventional vessels usually come from, owners spent the biggest part of

the year facing challenging freight rates, while at the same time it took almost half a

year for newbuilding prices to start correcting downwards and by that time negative

sentiment in the market had already overrun any appetite for ordering.

Demolition Market Total vessels scrapped this month: 98

Prices across the board touched year lows last month and from the looks of it, it

seems that there might still be room for further discounts. Despite the persistent

negative sentiment, which will most probably will be resuming at least for the first

quarter of the year, it seems that these new softer levels the market touched in De-

cember, offered to some breakers a “safer”, much lower entry point in the market,

helping activity, which increased substantially compared to November.

Contents

Special Feature ................................................ 2

Secondhand Market ....................................... 3

Newbuilding Market ...................................... 4

Demolition Market ......................................... 5

Dry Bulkers ...................................................... 6

Fleet Profile ............................................................................ 6

Sale and Purchase Market ................................................. 8

Freight Market ..................................................................... 12

Tankers ...........................................................13

Fleet Profile .......................................................................... 13

Sale and Purchase Market ............................................... 15

Freight Market ..................................................................... 19

Containerships...............................................20

Fleet Profile .......................................................................... 20

Markets .................................................................................. 22

Gas Carriers ....................................................23

Fleet Profile .......................................................................... 23

Markets .................................................................................. 25

Contact Information .....................................30

This report has been prepared and published by Intermodal Research & Valuations depart-ment. The material is intended for the clients of Intermodal Shipbrokers Co. and any re-production or re-distribution is prohibited without prior permission. Please refer to our disclaimer and legal disclosure on the final page for further information. If you wish to subscribe to this or any other report we produce, please contact us directly.

Newbuilding Prices (million US$)

Capesize VLCC Panamax LNG

$54.0 $96.8 $58.5 $187.6Panamax Suezmax Sub-Pmax LPG - VLGC

$29.0 $65.0 $32.4 $79.0Supramax Aframax Feedermax LPG - LGC

$27.0 $54.0 $27.0 $68.5Handysize LR1 Feeder LPG - MGC

$23.0 $46.0 $14.3 $52.5MR LPG - SGC

$36.6 $46.0

D D R B

D R B R

D R R R

R D R R

D R

Secondhand Prices of 5 year old vessels (million US$)

Capesize VLCC Panamax

$39.9 $77.0 $14.0Panamax Suezmax Sub-Pmax

$20.1 $56.5 $14.5Supramax Aframax Feedermax

$21.1 $42.0 $12.0Handysize LR1 Feeder

$17.0 $32.9 $4.6MR

$24.4

D R R

D B R

D D R

D B D

D

Scrap Prices India China Turkey Bangladesh Pakistan

Average ($/ldt) $433 $236 $293 $433 $428

© Intermodal Shipbrokers Co

December 2014 2

Last year has without a doubt been another challenging one both for

both our industry and our country. As Greece is currently dominated

by election fever, we cannot but wonder what sort of challenges we

could be facing in 2015, while as the bitter sweet taste the perfor-

mance of our industry left us with as 2014 ended is still strong, we

look back to the activity of Greek owners last year together with

what could be lying ahead for the different shipping markets this

year.

Greek owners were reported as Buyers in 340 of the 2014 reported

second-hand sales and as Sellers in 153 of them. This trend clearly

shows that despite the volatility in the freight market, Greeks were

still keen on snapping second-hand tonnage during the year. At the

same time they have shown a clear preference on Japanese quality

units, while the softening of asset prices that has been taking place

since mid-year, has also helped SnP activity, which despite the chal-

lenging conditions of the market in 2014, remained pretty much at

the same levels we saw back in 2013.

As far as the following months are concerned, and while the Dry

Bulk market remains under pressure, we expect SnP activity for dry

bulkers to considerably soften, as most owners will choose to sit on

the sidelines until they have a more clear view of what’s coming

ahead. On the tankers side, where things have been considerably

more upbeat, we expect buying interest for crude carriers to remain

stable overall at least for the first quarter of next year, while the

recent popularity of MR and LR1 tonnage seems to be holding well,

despite the fact that the long list of scheduled 2015 deliveries for the

former are expected to weigh down on freight rates, fact which will

most certainly scale back the current upside.

Out of the 2,874 newbuilding orders that were recorded during

2014, Greek owners were reported to be behind 127 of them, which

is almost a 30% decrease compared to 2013 Greek orders. The new-

building market has faced an extremely challenging year in terms of

activity and this has been mostly attributed to the sharp fall in dry

bulker orders compared to the previous year. Following the ordering

spree of 2013, newbuilding prices remained on an upward trend for

almost the entire first half of 2014 and despite the fact that the per-

formance of the dry bulk freight market missed the expectations

built up during the end of 2013. This has weighed down considera-

bly on ordering interest for conventional vessels.

Prospects for next year remain dim. Despite the fact that prices cur-

rently stand well off the highs of January, most owners currently

seem completely uninterested in revisiting the prospect of placing

an order. On top of that, even in sectors that are currently enjoying

some good earnings, the tonnage that is due to hit the water this

year, is bound to put pressure on earnings and thus will further de-

ter owners from heading back to the yards.

On the demolition front, 1,158 vessels in total were reported

scrapped in 2014, a number significantly smaller compared to 2013.

The percentage of Greek owned vessels that headed for scrapping

remained stable nonetheless, showing that the mentality of getting

rid of vintage tonnage and in most cases replacing it with modern

one is still part of the Greek mentality. The demolition market was

also under pressure last year. Following the intense scrapping activi-

ty of 2013, which in some cases created fairly “young fleets”, espe-

cially within size segments in the tanker sector, limited the volume

of potential scrapping candidates. At the same time and despite the

fact that demo prices were kept at significantly attractive levels dur-

ing the first half of the year, most owners kept holding on to the

hope of better freight rates during the last quarter of 2014, thus

ruling out the demolition option. On top of that and even more im-

portantly, as cheap Chinese scrap steel has been flooding the mar-

kets since the beginning of the summer, demo buyers in the Indian

subcontinent were forced to lower their bids by more than $70/ldt

in a very short period of time, making the demolition option even

less attractive to owners of vintage tonnage. Despite the fact that

steel demand remains overall healthy amongst breaker countries,

we expect the negative trend of both demo volume and prices to

resume next year, especially as any measures that could potentially

set a floor on Chinese steel imports are being delayed.

At the beginning of every year, people make New Year’s resolutions.

Perhaps the one for our industry should be to reinvent itself, which

is always a task that requires hard work but in this case might be

necessary in order to move ahead minimizing the extent to which

our expectations are missed and the eventual disappointment to

ourselves. Are we bound to witness rates achieved at the pick of last

cycle for prolonged periods anytime soon? Probably not. But this

doesn’t mean that there isn’t still value in operating ships today. I

often hear that the entry of private equity in shipping in the past

years has added to the often talked about oversupply of tonnage,

but in my opinion this is not true. Private equity is actually behind a

fairly small part of the funding that added the “extra” tonnage we

are dealing with today. What non-traditional shipping players are

responsible for though, is probably the change of mentality that

made some in our industry eager to chase the quick asset play rather

than operate a ship throughout its commercial life and gain from

market conditions that could still bring along substantial profits. So

let’s get back to the basics and hope that this won’t be a resolution

that shares the same fate most New Year resolutions do...

Eva Tzima

Research Analyst

Challenges and Resolutions

SPECIAL FEATURE


December 2014 3

SnP activity in December sustained its levels

from the previous month. Despite the fact that

holidays together with additional pressure on

the freight market, in the case of dry bulkers,

were expected to slow down the number of

transactions towards year end, it seems that

interest for second hand tonnage remains firm,

while the gap created by the pull back in bulker

sales was filled by the transactions that took

place in the tanker sector.

The number of tanker sales have in fact in-

creased more than 60% compared to the levels

of November and we expect the trend to con-

tinue in January as well.

Activity in 2014 Vs 2013

Source: Intermodal Research & Valuations

Vessel Purchases (last 12 months)

Buyer Statistics

UNITS OUTLAY ($)

Greece 153 $3,233.21m

Germany 144 $1,580.07m

Japan 142 $2,621.38m

Singapore 62 $1,495.50m

Norway 44 $755.93m

Hong Kong 41 $919.94m

U. K. 34 $1,407.55m

Chinese Taipei 33 $1,250.65m

U. S. A. 33 $986.30m

Turkey 31 $312.95m

undisclosed 218 $3,331.71m

all other 500 $9,766.60m

TOTAL 1435 $27,661.80m

Seller Statistics (2014)




Summary

UNITS OUTLAY ($) DWT

January-2014 170 $3,041.83m 11,482,636

February-2014 155 $2,622.10m 8,816,770

March-2014 161 $3,701.20m 11,783,757

April-2014 109 $2,498.10m 6,088,700

May-2014 123 $2,287.60m 8,040,220

June-2014 103 $2,266.32m 7,256,051

July-2014 92 $1,705.40m 6,868,858

August-2014 77 $1,687.64m 3,377,656

September-2014 134 $2,383.65m 7,451,137

October-2014 86 $1,181.55m 4,096,903

November-2014 108 $2,011.37m 7,445,317

December-2014 117 $2,275.04m 6,207,945

TOTAL 1435 $27,661.80m 88,915,950

UNITS % OUTLAY ($) % DWT % UNITS OUTLAY ($) DWT

Greece 340 23.7% $8,444.78m 30.5% 29,993,426 33.7% 366 $6,326.45m 26,588,960

U. S. A. 102 7.1% $3,533.15m 12.8% 9,450,370 10.6% 75 $1,423.75m 4,060,016

China 82 5.7% $1,013.02m 3.7% 4,667,461 5.2% 96 $1,221.32m 6,147,584

Singapore 79 5.5% $1,583.97m 5.7% 5,326,122 6.0% 41 $614.02m 2,868,739

S. Korea 69 4.8% $1,029.91m 3.7% 5,202,873 5.9% 46 $514.45m 2,925,643

Norway 56 3.9% $1,903.55m 6.9% 3,633,962 4.1% 60 $1,939.10m 3,485,177

Germany 49 3.4% $742.25m 2.7% 2,290,953 2.6% 44 $529.42m 1,245,004

U. K. 45 3.1% $629.44m 2.3% 1,541,221 1.7% 21 $229.60m 747,757

Italy 35 2.4% $877.43m 3.2% 3,166,516 3.6% 31 $809.15m 1,738,043

Canada 33 2.3% $1,209.00m 4.4% 3,396,508 3.8% 4 $216.45m 145,723

undisclosed 257 17.9% $2,508.04m 9.1% 8,275,615 9.3% 341 $2,369.98m 9,415,587

all other 288 20.1% $4,187.25m 15.1% 11,970,923 13.5% 337 $3,831.52m 15,558,115

TOTAL 1435 100.0% $27,661.80m 100.0% 88,915,950 100.0% 1,462 $20,025.21m 74,926,348

2014 2013

0

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80

100

120

140

160

180units 2013 2014


December 2014 4

Activity in the newbuilding front slowed down last month, with tank-

er orders making up for the decreased number of bulker orders here

as well. A first assessment for the newbuilding market in 2014 is

that the fall in activity has been dramatic, which comes as no sur-

prise given the fact that over at the dry bulker side, where most

orders of conventional vessels usually come from, owners spent the

biggest part of the year facing challenging freight rates, while at the

same time it took almost half a year for newbuilding prices to start

correcting downwards and by that time negative sentiment in the

market had already overrun any appetite for ordering.

As we have mentioned a few times already, we don’t see any reason

why activity would be picking up in the following couple of months,

while even in the case of the tanker sector where things have been

considerably more positive, we still believe that second hand ton-

nage will be more popular for those looking to invest.

New orders placed (last 12 months)

Summary


Activity in 2014 Vs 2013 (Bulkers, Tankers, Containers, Gas Carriers)


Percentage of new orders secured by each Shipbuilding Nation (2014)


Buyer Statistics (2014)


0

50

100

150

200

250

300

350

400

units 2013 2014

12%

42%21%

25%

S. Korea

China

Japan

All Other

Bulk Carrier Tanker Gas Carrier Container Other Total

January-2014 226 68 13 34 354 695

February-2014 64 48 30 8 115 265

March-2014 78 39 7 17 122 263

April-2014 53 25 10 24 71 183

May-2014 34 27 25 17 87 190

June-2014 97 66 16 9 138 326

July-2014 45 16 17 4 88 170

August-2014 50 27 3 11 95 186

September-2014 53 19 13 18 72 175

October-2014 25 18 17 10 101 171

November-2014 36 10 9 2 71 130

December-2014 31 28 10 5 45 120

TOTAL 792 391 170 159 1,359 2,874

UNITS OUTLAY (US$) DWT

China 258 $5,547.97m 16,978,232

Japan 215 $2,583.70m 10,379,652

Singapore 183 $2,324.76m 7,181,487

Greece 127 $5,512.72m 14,259,319

Norway 103 $2,398.23m 5,248,277

Germany 77 $1,219.00m 4,728,809

U. S. A. 68 $4,074.00m 3,678,116

U. K. 54 $1,728.62m 1,814,044

Netherlands 50 $191.00m 370,665

Malaysia 52 $2,782.93m 264,600

undisclosed 885 $4,334.40m 25,809,086

all other 802 $18,324.56m 30,273,926

Total 2874 $51,021.89m 120,986,213


December 2014 5

The demolition market is still facing troubling times, with cheap

Chinese steel remaining the main hurdle breakers in the Indian sub-

continent face. Prices across the board touched year lows last

month and from the looks of it, it seems that there might still be

room for further discounts. Despite the persistent negative senti-

ment, which will most probably will be resuming at least for the first

quarter of the year, it seems that these new softer levels the market

touched in December, offered to some breakers a “safer”, much

lower entry point in the market, helping activity, which increased

substantially compared to November.

On the positive side, steel demand remains healthy across the Indian

subcontinent, while at the same time the Indian Rupee has been

posting gains against its USD counterpart, recently touching a four

week high on the back of foreign investors supporting the local mar-

kets.

Wet $445 D $248 D $298 R $445 D $440 D

Dry $421 D $224 D $288 R $421 D $416 D

India China Turkey Bangladesh PakistanAverage Prices for scrap (US$/ldt)

Summary Vessels Scrapped (last 12 months)


UNITS LDT DWT

January-2014 109 593,227 2,302,797

February-2014 80 786,471 3,260,335

March-2014 109 694,499 3,467,452

April-2014 99 782,773 4,113,997

May-2014 127 790,047 3,895,547

June-2014 135 582,460 2,979,605

July-2014 79 563,474 2,672,018

August-2014 88 527,670 2,524,050

September-2014 91 536,521 2,673,271

October-2014 67 460,086 2,500,275

November-2014 76 483,345 2,641,784

December-2014 98 403,991 2,160,704

TOTAL 1,158 7,204,564 35,191,835

Demo Seller Statistics Activity in 2014 Vs 2013


Demo Country Statistics


UNITS % LDT % DWT % UNITS LDT DWT

India 322 27.8% 2,874,559 39.9% 9,947,407 28.3% 355 3,037,802 12,301,719

China 208 18.0% 1,092,592 15.2% 7,439,024 21.1% 312 1,885,342 10,518,956

Bangladesh 182 15.7% 1,288,503 17.9% 6,750,244 19.2% 168 1,849,271 10,560,644

Turkey 153 13.2% 277,408 3.9% 1,199,638 3.4% 186 408,607 1,349,708

Pakistan 83 7.2% 1,067,145 14.8% 6,649,197 18.9% 84 1,168,856 8,096,411

Unk./Other 210 18.1% 604,357 8.4% 3,206,325 9.1% 580 1,257,281 7,742,445

Total 1158 100.0% 7,204,564 100.0% 35,191,835 100.0% 1,685 9,607,159 50,569,883

2014 2013

UNITS DWT UNITS DWT

China 202 7,794,884 200 7,399,776

Greece 92 3,829,027 106 5,263,549

Russia 41 335,304 70 646,831

Turkey 39 469,533 99 1,411,421

Indonesia 37 865,029 17 627,821

Hong Kong 35 1,754,345 43 2,302,752

Singapore 32 1,599,665 38 2,734,563

U. A. E. 30 687,723 26 1,593,638

India 29 569,563 35 963,088

S. Korea 24 652,483 28 997,494

undisclosed 130 5,409,313 164 6,634,392

all other 467 11,224,966 859 19,994,558

Total 1158 35,191,835 1,685 50,569,883

2014 2013

0

50

100

150

200

250units 2013 2014


December 2014 28

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December 2014 29

Intermodal Shipbrokers Co.

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For any further queries please do not hesitate to contact our Research Department.

The information contained in this report has been obtained from various sources, as

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ness. Whilst every care has been taken in the production of the above review, no

liability can be accepted for any loss or damage incurred in any way whatsoever by

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