The Clarkson SHIPPING REVIEW OUTLOOK Autumn 2012 A HALF YEARLY REVIEW OF WORLD-WIDE SHIPPING TRENDS Shipping Review Outlook ISSN 1360-8061 (Print) ISSN 1743-7296 (Online) Published and Distributed by: CLARKSON RESEARCH SERVICES St Magnus House 3 Lower Thames Street London EC3R 6HE icensed to The Hong Kong Polytechnic University.Distribution is restricted:please remember to acknowledge the source.http://ww.clarksons.net 01/11/2012 06:20:04 15304 Te:020-7334-3134 Fax:020-7334-0539 E-mail:sales.crs @clarksons.co.uk Web-site:http://www.crsl.com World Copyright Reserved to Clarkson Research Services,2012
The Clarkson SHIPPING REVIEW & OUTLOOK Autumn 2012 A HALF YEARLY REVIEW OF WORLD-WIDE SHIPPING TRENDS Shipping Review & Outlook ISSN 1360-8061 (Print) ISSN 1743-7296 (Online) Published and Distributed by: CLARKSON RESEARCH SERVICES St Magnus House 3 Lower Thames Street London EC3R 6HE Tel: 020-7334-3134 Fax: 020-7334-0539 E-mail: sales.crs@clarksons.co.uk Web-site: http://www.crsl.com © World Copyright Reserved to Clarkson Research Services, 2012 Licensed to The Hong Kong Polytechnic University. Distribution is restricted; please remember to acknowledge the source. http://www.clarksons.net 01/11/2012 06:20:04 15304 Licensed to The Hong Kong Polytechnic University. Distribution is restricted; please remember to acknowledge the source. http://www.clarksons.net 01/11/2012 06:20:04 15304
CONTENTS SHIPPING REVIEW OUTLOOK TABLE OF CONTENTS 2.5 SALE PURCHASE 81 icensed to The SECTION 1 2.5.1 Shipbuilding Market 2 2.5.2 Sale Purchase Market 86 Hong SHIPPING MARKET OUTLOOK 2.5.3 Demolition Market 90 2.6 CRUISE SHIPS 93 Executive Summary 7 2.6.1 Cruise Ship Market 94 1.1 Freight Market Overview 8 1.2 World Economy Sea Trade 10 1.3 The Shipbuilding Market 12 SECTION 3 Kong Polytechnic University. 1.4 The Demolition Market 14 SHIPPING REVIEW DATABASE 1.5 Dry Bulk Market Outlook 16 1.6 Tanker Market Outlook 20 1.7 Container Market Outlook 24 Global Overview /Historical Trade Series Table 1 World Seaborne Trade 101 Table 2 World Seaborne Trade (Tonne Miles)101 Table 3 Seaborne Crude Oil Trade 102 SECTION 2 Table 4 Seaborne Oil Products Trade 103 Table 5 Seaborne Dry Cargo Trades 104 SHIPPING SECTOR REPORTS Table 6 Worldwide Bunker Price Trends 105 Distribution is restricted:please Table 7 World GDP 105 2.1 OIL TANKERS 29 Historical Fleet Series 2.1.1 VLCC Market 30 Table 8 Total Fleet(Dwt) 106 Table 9 106 2.1.2 Suezmax Market 32 World Fleet by YOB(Dwt) Table 10 Total Fleet (Numbers) 107 2.1.3 Aframax Market 34 Table 11 World Fleet by YOB (Numbers) 107 2.1.4 Product Tanker Market 36 Table 12 Total Orderbook (Dwt) 108 Table 13 Total Contracting (Dwt) 108 2.1.5 Chemical Tanker Market 42 Table 14 Total Orderbook (Numbers) 109 2.1.6 Offshore Market 以 Table 15 Total Contracting (Numbers) 109 2.1.7 46 Table 16 Total Deliveries (Dwt) 110 remember to acknowledge the source Bunker Market Table 17 Total Demolition (Dwt) 110 2.2 GAS CARRIERS 49 Table 18 Total Deliveries (Numbers) 111 2.2.1 LPG Carrier Market 50 Table 19 Total Demolition (Numbers) 111 2.2.2 LNG Carrier Market 56 Table 20 Tanker Fleet Deliveries 112 Table 21 Tanker Orderbook Contracting 112 2.3 DRY BULK 59 Table 22 Tanker Demolition 113 2.3.1 Capesize Market 60 Table 23 Tanker Losses 113 6 Table 24 2.3.2 Tanker Fleet Development 114 Panamax Market Table 25 2.3.3 Handymax Market 6 Combined Carrier Fleet Development 114 Table 26 Chemical Tanker Fleet Development 115 2.3.4 Handysize Market 66 Table 27 Chemical Tanker Fleet Development 2.4 LINER VESSELS 69 IMO 1 115 Table 28 Chemical Tanker Fleet Development 2.4.1 Containership Market IMO2 115 2.4.2 MPP General Cargo Market 74 Table 29 Chemical Tanker Fleet Development IMO3 2.4.3 Ro-Ro Market 76 115 http://www.clarksons.nel 01/11/2012 06:20:04 15304 Table 30 Bulkcarrier Fleet Deliveries 116 2.4.4 Reefer Market 78 Table 31 Bulkcarrier Orderbook Contracting 116 Table 32 Bulkcarrier Demolition 117 Clarkson Research Services Autumn 2012 3
Clarkson Research Services Autumn 2012 3 CONTENTS SECTION 1 SHIPPING MARKET OUTLOOK Executive Summary 7 1.1 Freight Market Overview 8 1.2 World Economy & Sea Trade 10 1.3 The Shipbuilding Market 12 1.4 The Demolition Market 14 1.5 Dry Bulk Market Outlook 16 1.6 Tanker Market Outlook 20 1.7 Container Market Outlook 24 SECTION 2 SHIPPING SECTOR REPORTS 2.1 OIL & TANKERS 29 2.1.1 VLCC Market 30 2.1.2 Suezmax Market 32 2.1.3 Aframax Market 34 2.1.4 Product Tanker Market 36 2.1.5 Chemical Tanker Market 42 2.1.6 Offshore Market 44 2.1.7 Bunker Market 46 2.2 GAS CARRIERS 49 2.2.1 LPG Carrier Market 50 2.2.2 LNG Carrier Market 56 2.3 DRY BULK 59 2.3.1 Capesize Market 60 2.3.2 Panamax Market 62 2.3.3 Handymax Market 64 2.3.4 Handysize Market 66 2.4 LINER VESSELS 69 2.4.1 Containership Market 70 2.4.2 MPP / General Cargo Market 74 2.4.3 Ro-Ro Market 76 2.4.4 Reefer Market 78 2.5 SALE & PURCHASE 81 2.5.1 Shipbuilding Market 82 2.5.2 Sale & Purchase Market 86 2.5.3 Demolition Market 90 2.6 CRUISE SHIPS 93 2.6.1 Cruise Ship Market 94 SECTION 3 SHIPPING REVIEW DATABASE Global Overview / Historical Trade Series Table 1 World Seaborne Trade 101 Table 2 World Seaborne Trade (Tonne Miles) 101 Table 3 Seaborne Crude Oil Trade 102 Table 4 Seaborne Oil Products Trade 103 Table 5 Seaborne Dry Cargo Trades 104 Table 6 Worldwide Bunker Price Trends 105 Table 7 World GDP 105 Historical Fleet Series Table 8 Total Fleet (Dwt) 106 Table 9 World Fleet by YOB (Dwt) 106 Table 10 Total Fleet (Numbers) 107 Table 11 World Fleet by YOB (Numbers) 107 Table 12 Total Orderbook (Dwt) 108 Table 13 Total Contracting (Dwt) 108 Table 14 Total Orderbook (Numbers) 109 Table 15 Total Contracting (Numbers) 109 Table 16 Total Deliveries (Dwt) 110 Table 17 Total Demolition (Dwt) 110 Table 18 Total Deliveries (Numbers) 111 Table 19 Total Demolition (Numbers) 111 Table 20 Tanker Fleet & Deliveries 112 Table 21 Tanker Orderbook & Contracting 112 Table 22 Tanker Demolition 113 Table 23 Tanker Losses 113 Table 24 Tanker Fleet Development 114 Table 25 Combined Carrier Fleet Development 114 Table 26 Chemical Tanker Fleet Development 115 Table 27 Chemical Tanker Fleet Development - IMO 1 115 Table 28 Chemical Tanker Fleet Development - IMO 2 115 Table 29 Chemical Tanker Fleet Development - IMO 3 115 Table 30 Bulkcarrier Fleet & Deliveries 116 Table 31 Bulkcarrier Orderbook & Contracting 116 Table 32 Bulkcarrier Demolition 117 SHIPPING REVIEW & OUTLOOK TABLE OF CONTENTS Licensed to The Hong Kong Polytechnic University. Distribution is restricted; please remember to acknowledge the source. http://www.clarksons.net 01/11/2012 06:20:04 15304 Licensed to The Hong Kong Polytechnic University. Distribution is restricted; please remember to acknowledge the source. http://www.clarksons.net 01/11/2012 06:20:04 15304
CONTENTS Table 33 Bulkcarrier Losses 117 Table 81 General Cargo Tramp Fleet 143 Table 34 LPG Carrier Fleet Development 118 Table 82 Ro-Ro Fleet 144 Table 35 LNG Carrier Fleet Development 118 Table 83 PCC Fleet 144 Table 36 Containership Fleet Development 119 Table 84 Reefer Fleet 145 Table 37 Reefer Fleet Development 119 Table 85 Cruise Fleet(GT) 146 Table 38 MPP Fleet Development 120 Table 86 Cruise Fleet (berths) 146 Table 39 General Cargo Fleet Development 120 Table 40 Ro-Ro Fleet Development 121 Bulk Fleet Flag Ownership,1st March 2012 icensed to The Table 41 PCC Fleet Development 121 Table 87 Top World Bulk Fleets by Flag of Registration 147 Hong Historical Rates Prices Table 88 Top Tanker Combined Carrier Table 42 The Clarkson Average Earnings Index 122 Fleet Owners (by No.Dwt) 148 Table 43 Tanker Freight Rates 123 Table 89 Top Bulk Combined Carrier Table 44 Dry Bulk Freight Rates 124 Fleet Owners (by No.Dwt) 149 Table 45 Tanker Bulkcarrier N/B Prices 125 Table 90 Top Operator-Owner Container Table 46 Secondhand Tanker Prices 126 Fleets(by TEU) 150 Kong Polytechnic Uni Table 47 Secondhand Bulkcarrier Prices 127 Table 91 Top Charter-Owner Container Table 48 Liner Vessel Charter Rates 128 Fleets(by TEU) 150 Table 49 Liner Vessel Secondhand Prices 128 Clarkson Research Ship Sales Database Table 50 Liner Vessel Newbuilding Prices 128 129 Table 92 Secondhand Sales Volumes 151 Table 51 Gas Carrier Rates Prices Table 52 Offshore Fleet Rates 130 Table 93 Recently Reported Tanker Sales 152 Table 94 Recently Reported Bulkcarrier Sales 153 Distribution Fleets by Size Age,Ist March 2012 Table 95 Recently Reported Dry Cargo Sales 154 Table 53 Tanker Fleet by Size Age 131 Fleet Additions/Removals Table 54 Tanker Fleet Development by Size 131 Table 96 Recently Reported Bulk Contracts 155 Table 55 D/Hull Tanker Fleet by Size Age 132 is restricted: Table 56 Coated Tanker Fleet by Size Age 132 Table 97 Recently Reported Non-Bulk Contracts 156 Table 57 Chemical Tanker Fleet by Size Table 98 Recently Reported Tanker,Combo. please Age 133 Gas RoRo Scrap Sales 157 Table 58 Other Specialised Tanker Fleet by Table 99 Recently Reported Bulk Dry Size Age 133 Cargo Scrap Sales 158 Table 59 Bulkcarrier Fleet by Size Age 134 Table 60 Bulkcarrier Fleet Development 134 Cruise Industry Table 61 Combined Carrier Fleet by Size Once again,our cruise industry chapter was written by Age 135 Bill Ebersold.former Director of Statistics and Econom- Table 62 Combined Carrier Fleet Development ic Analysis for the U.S.Maritime Administration,and acknowledge by Size 135 currently a consultant and writer on the cruise industry. Table 63 LPG Vessels by Size Age 136 Table 64 LNG Vessels by Size Age 136 Data Validity Table 65 LPG Fleet Development by Size 136 Please note that the cut-off date for fleet data and fore- the source Table 66 LNG Fleet Development by Size 136 casts in this report is 1st September 2012.For commer- Table 67 Cruise Fleet by Size Age(GT) 137 cial data relating to rates earnings,prices etc,averages incorporating September 2012 data have been included Table 68 Cruise Fleet by Size Age(Berths) 137 if possible.Otherwise,the most recent annual/monthly Table 69 Cruise Fleet Development 137 data has been used. Fleet by Year of Build,1st March 2012 Disclaimer Table 70 Tanker Fleet 138 The information supplied herewith is believed to be Table 71 Double Hull Tanker Fleet 138 correct but the accuracy thereof is not guaranteed and Table 72 Coated Tanker Fleet 139 the Company and its employees cannot accept liability Table 73 Chemical Tanker Fleet 139 for loss suffered in consequence of reliance on the infor- Table 74 Bulkcarrier Fleet 140 mation provided.Provision of this data does not obviate Table 75 Combined Carrier Fleet 140 the need to make further appropriate enquiries and in- spections.The information is for the use of the recipient Table 76 LPG Carrier Fleet 141 only and is not to be used in any document for the pur- Table 77 LNG Carrier Fleet 141 poses of raising finance without the written permission http://www.clarksons.nel 01/11/2012 06:20:04 15304 Table 78 Containership Fleet 142 of Clarkson Research Services Limited. Table 79 Multi-Purpose Vessel Fleet 142 Table 80 General Cargo Liner Fleet 143 Clarkson Research Services Autumn 2012
Clarkson Research Services 4 Autumn 2012 CONTENTS Table 33 Bulkcarrier Losses 117 Table 34 LPG Carrier Fleet Development 118 Table 35 LNG Carrier Fleet Development 118 Table 36 Containership Fleet Development 119 Table 37 Reefer Fleet Development 119 Table 38 MPP Fleet Development 120 Table 39 General Cargo Fleet Development 120 Table 40 Ro-Ro Fleet Development 121 Table 41 PCC Fleet Development 121 Historical Rates & Prices Table 42 The Clarkson Average Earnings Index 122 Table 43 Tanker Freight Rates 123 Table 44 Dry Bulk Freight Rates 124 Table 45 Tanker & Bulkcarrier N/B Prices 125 Table 46 Secondhand Tanker Prices 126 Table 47 Secondhand Bulkcarrier Prices 127 Table 48 Liner Vessel Charter Rates 128 Table 49 Liner Vessel Secondhand Prices 128 Table 50 Liner Vessel Newbuilding Prices 128 Table 51 Gas Carrier Rates & Prices 129 Table 52 Offshore Fleet & Rates 130 Fleets by Size & Age, 1st March 2012 Table 53 Tanker Fleet by Size & Age 131 Table 54 Tanker Fleet Development by Size 131 Table 55 D/Hull Tanker Fleet by Size & Age 132 Table 56 Coated Tanker Fleet by Size & Age 132 Table 57 Chemical Tanker Fleet by Size & Age 133 Table 58 Other Specialised Tanker Fleet by Size & Age 133 Table 59 Bulkcarrier Fleet by Size & Age 134 Table 60 Bulkcarrier Fleet Development 134 Table 61 Combined Carrier Fleet by Size & Age 135 Table 62 Combined Carrier Fleet Development by Size 135 Table 63 LPG Vessels by Size & Age 136 Table 64 LNG Vessels by Size & Age 136 Table 65 LPG Fleet Development by Size 136 Table 66 LNG Fleet Development by Size 136 Table 67 Cruise Fleet by Size & Age (GT) 137 Table 68 Cruise Fleet by Size & Age (Berths) 137 Table 69 Cruise Fleet Development 137 Fleet by Year of Build, 1st March 2012 Table 70 Tanker Fleet 138 Table 71 Double Hull Tanker Fleet 138 Table 72 Coated Tanker Fleet 139 Table 73 Chemical Tanker Fleet 139 Table 74 Bulkcarrier Fleet 140 Table 75 Combined Carrier Fleet 140 Table 76 LPG Carrier Fleet 141 Table 77 LNG Carrier Fleet 141 Table 78 Containership Fleet 142 Table 79 Multi-Purpose Vessel Fleet 142 Table 80 General Cargo Liner Fleet 143 Table 81 General Cargo Tramp Fleet 143 Table 82 Ro-Ro Fleet 144 Table 83 PCC Fleet 144 Table 84 Reefer Fleet 145 Table 85 Cruise Fleet (GT) 146 Table 86 Cruise Fleet (berths) 146 Bulk Fleet Flag & Ownership, 1st March 2012 Table 87 Top World Bulk Fleets by Flag of Registration 147 Table 88 Top Tanker & Combined Carrier Fleet Owners (by No. & Dwt) 148 Table 89 Top Bulk & Combined Carrier Fleet Owners (by No. & Dwt) 149 Table 90 Top Operator-Owner Container Fleets (by TEU) 150 Table 91 Top Charter-Owner Container Fleets (by TEU) 150 Clarkson Research Ship Sales Database Table 92 Secondhand Sales Volumes 151 Table 93 Recently Reported Tanker Sales 152 Table 94 Recently Reported Bulkcarrier Sales 153 Table 95 Recently Reported Dry Cargo Sales 154 Fleet Additions / Removals Table 96 Recently Reported Bulk Contracts 155 Table 97 Recently Reported Non-Bulk Contracts 156 Table 98 Recently Reported Tanker, Combo, Gas & RoRo Scrap Sales 157 Table 99 Recently Reported Bulk & Dry Cargo Scrap Sales 158 Cruise Industry Once again, our cruise industry chapter was written by Bill Ebersold, former Director of Statistics and Economic Analysis for the U.S. Maritime Administration, and currently a consultant and writer on the cruise industry. Data Validity Please note that the cut-off date for fleet data and forecasts in this report is 1st September 2012. For commercial data relating to rates earnings, prices etc, averages incorporating September 2012 data have been included if possible. Otherwise, the most recent annual/monthly data has been used. Disclaimer The information supplied herewith is believed to be correct but the accuracy thereof is not guaranteed and the Company and its employees cannot accept liability for loss suffered in consequence of reliance on the information provided. Provision of this data does not obviate the need to make further appropriate enquiries and inspections. The information is for the use of the recipient only and is not to be used in any document for the purposes of raising finance without the written permission of Clarkson Research Services Limited. Licensed to The Hong Kong Polytechnic University. Distribution is restricted; please remember to acknowledge the source. http://www.clarksons.net 01/11/2012 06:20:04 15304 Licensed to The Hong Kong Polytechnic University. Distribution is restricted; please remember to acknowledge the source. http://www.clarksons.net 01/11/2012 06:20:04 15304
SECTION I SHIPPING MARKET OUTLOOK CONTENTS EXECUTIVE SUMMARY 7 icensed to The Hong Kong Polytechnic University.Distribution 1.1 FREIGHT MARKET OVERVIEW 8 1.2 WORLD ECONOMY SEA TRADE 10 1.3 THE SHIPBUILDING MARKET 12 1.4 THE DEMOLITION MARKET 14 1.5 DRY BULK MARKET OUTLOOK 16 1.6 TANKER MARKET OUTLOOK 20 1.7 CONTAINERSHIP MARKET OUTLOOK 24 he source.http://www.clarksons.net 01/11/2012 06:20:04 15304
SECTION 1 SHIPPING MARKET OUTLOOK CONTENTS EXECUTIVE SUMMARY 7 1.1 FREIGHT MARKET OVERVIEW 8 1.2 WORLD ECONOMY & SEA TRADE 10 1.3 THE SHIPBUILDING MARKET 12 1.4 THE DEMOLITION MARKET 14 1.5 DRY BULK MARKET OUTLOOK 16 1.6 TANKER MARKET OUTLOOK 20 1.7 CONTAINERSHIP MARKET OUTLOOK 24 Licensed to The Hong Kong Polytechnic University. Distribution is restricted; please remember to acknowledge the source. http://www.clarksons.net 01/11/2012 06:20:04 15304 Licensed to The Hong Kong Polytechnic University. Distribution is restricted; please remember to acknowledge the source. http://www.clarksons.net 01/11/2012 06:20:04 15304
1.SHIPPING MARKET OUTLOOK EXECUTIVE SUMMARY September is a pivotal month as shipping the eight months to 1st September the tanker investors return from holiday and take a new fleet has increased 2.7%;the bulk carrier fleet look at what lies ahead.Before the holidays this 8.5%;and the containership fleet 5.2%.This is icensed to The year many hoped that the autumn would see the more tonnage than is required to meet demand, bottom of the cycle,and markets would start to and has pushed the surplus capacity up to recover in 2013.But over the summer that around 10-12%of the fleet.So far,little of this positive vision has given way to a more realistic surplus has found its way into layup,and most is view that it will be a year or two before things being soaked up by slow steaming and waiting. start to get better,though the precise timescale remains vague. Shipbuilding prices are down 9%this year, though $95m for a VLCC,or $26.3m for a Kong Polytechnic University. Many factors have contributed to this change Panamax bulk carrier are still not in the "bargain of sentiment.The most pressing is lower basement"category.Although the world earnings.The Clarksea Index,which covers shipbuilding orderbook has fallen below 20%of tankers,bulkers,containerships and gas carriers the fleet,down from 50%at the peak,many Distribution has been bumping along below $10,000/day for yards have won orders in the more specialized most of the year,and over the last month has segments of the market and in the first eight been under $9,000/day.Allowing for waiting months of 2012,the offshore sector accounted is restricted: time,which is not included in this index,these for 59%of the value of orders placed. earnings levels are uncomfortably close to The bulk carrier market continues to be the please operating expenses and cash pressures are building up. most vulnerable,with a rapidly growing surplus 雪 and 154m dwt of ships still to deliver.The The shaky state of the world economy has tanker market has a more manageable supply also undermined confidence.Six months ago we side,but demand remains uncomfortably weak, described the outlook for 2012 as "uninspiring", thanks in particular to declining US imports, but today sentiment is more negative.The high oil prices and new fuel efficient technology acknowledge problems in the Eurozone show little sign of which are undermining the growth of oil having an early solution;the US recovery looks demand.Meanwhile the container market fragile;the Chinese economy is slowing and so continues to suffer from the classic combination the source are many of the Asian economies. of weakening demand and continued rapid growth of supply. Despite this negative sentiment,we still expect sea trade to grow by about 4.3%in 2012, Pulling all this together,the markets may well though the prospects for 2013 remain murky. be approaching the bottom of the cycle,but a Although not as fast as in the last decade, spell in the trough is likely before the gap current growth is in line with long-term trends, between supply and demand,which has taken but the possibility of further slowdown next year four years to develop,shrinks enough to let the is a worry for investors. market move up convincingly.Meanwhile,the shipbuilders,who cannot reasonably expect to Against that background,the main problem fill their vast capacity with specialised orders, remains the fast growth of the merchant fleet.It must look elsewhere.This may lead to http://www.clarksons.nel 01/11/2012 06:20:04 15304 is on track to grow 7%in 2012,faster than trade. downward pressure on prices and speculative Much of this growth has already happened-in ordering.Not an easy time to be a shipowner. Clarkson Research Services Autumn 2012
Clarkson Research Services Autumn 2012 7 1. SHIPPING MARKET OUTLOOK SHIPPING MARKET OUTLOOK EXECUTIVE SUMMARY ! September is a pivotal month as shipping investors return from holiday and take a new look at what lies ahead. Before the holidays this year many hoped that the autumn would see the bottom of the cycle, and markets would start to recover in 2013. But over the summer that positive vision has given way to a more realistic view that it will be a year or two before things start to get better, though the precise timescale remains vague. ! Many factors have contributed to this change of sentiment. The most pressing is lower earnings. The Clarksea Index, which covers tankers, bulkers, containerships and gas carriers has been bumping along below $10,000/day for most of the year, and over the last month has been under $9,000/day. Allowing for waiting time, which is not included in this index, these earnings levels are uncomfortably close to operating expenses and cash pressures are building up. ! The shaky state of the world economy has also undermined confidence. Six months ago we described the outlook for 2012 as "uninspiring", but today sentiment is more negative. The problems in the Eurozone show little sign of having an early solution; the US recovery looks fragile; the Chinese economy is slowing and so are many of the Asian economies. ! Despite this negative sentiment, we still expect sea trade to grow by about 4.3% in 2012, though the prospects for 2013 remain murky. Although not as fast as in the last decade, current growth is in line with long-term trends, but the possibility of further slowdown next year is a worry for investors. ! Against that background, the main problem remains the fast growth of the merchant fleet. It is on track to grow 7% in 2012, faster than trade. Much of this growth has already happened - in the eight months to 1st September the tanker fleet has increased 2.7%; the bulk carrier fleet 8.5%; and the containership fleet 5.2%. This is more tonnage than is required to meet demand, and has pushed the surplus capacity up to around 10-12% of the fleet. So far, little of this surplus has found its way into layup, and most is being soaked up by slow steaming and waiting. ! Shipbuilding prices are down 9% this year, though $95m for a VLCC, or $26.3m for a Panamax bulk carrier are still not in the "bargain basement" category. Although the world shipbuilding orderbook has fallen below 20% of the fleet, down from 50% at the peak, many yards have won orders in the more specialized segments of the market and in the first eight months of 2012, the offshore sector accounted for 59% of the value of orders placed. ! The bulk carrier market continues to be the most vulnerable, with a rapidly growing surplus and 154m dwt of ships still to deliver. The tanker market has a more manageable supply side, but demand remains uncomfortably weak, thanks in particular to declining US imports, high oil prices and new fuel efficient technology which are undermining the growth of oil demand. Meanwhile the container market continues to suffer from the classic combination of weakening demand and continued rapid growth of supply. ! Pulling all this together, the markets may well be approaching the bottom of the cycle, but a spell in the trough is likely before the gap between supply and demand, which has taken four years to develop, shrinks enough to let the market move up convincingly. Meanwhile, the shipbuilders, who cannot reasonably expect to fill their vast capacity with specialised orders, must look elsewhere. This may lead to downward pressure on prices and speculative ordering. Not an easy time to be a shipowner. Licensed to The Hong Kong Polytechnic University. Distribution is restricted; please remember to acknowledge the source. http://www.clarksons.net 01/11/2012 06:20:04 15304 Licensed to The Hong Kong Polytechnic University. Distribution is restricted; please remember to acknowledge the source. http://www.clarksons.net 01/11/2012 06:20:04 15304