Page 25: of Maritime Reporter Magazine (June 1999)

Market Reports

Shipbuilding: Plenty of pain, where s the gain?

New Ship Orders (by size, mill, dwt)

The year-end turbulence of 1997 continued with even worse effect in 1998. With the exception of tankers, the overall demand for new vessels decreased sharply. Prices dropped heavily over the year, on average, by somewhere between 15 and 20 with the one exception: cruise vessels.

The Asian crisis was, of course, the main reason for the difficulties. It must be noted, however, that the dif- ficulties in the Korean economy and the subsequent IMF intervention resulted in a sharp depreciation of the Korean Won which facilitated price reductions for the Korean ship- yards. It even enabled them to show profitable figures despite the sub- stantial fall in prices. As being shown the orderbook did not change drastically from last year. In fact, the third and fourth quarters of 1998 showed a slight increase. The reason was that the ordering activity for tankers, and in particular for

VLCCs, continued to be strong throughout the year. The shipyards lead times continued to be perceived as comfortable, although quite a number of earlier deliveries which had not been available at the begin- ning of the year did come to the sur- face now and again.

Containerships: German owners in particular were still active by means of K/G system. This system is again under discussion as a result of the change of government. Orders for 157 vessels were placed represent- ing 430,000 TEUs. This compares to 165 vessels and 321,000 TEUs placed in 1997. The orderbook now stands at 280 vessels or a total capacity of 623,880 TEUs.

Tankers: The main activity was in

VLCCs and 37 vessels were ordered.

Demand for Suezmaxes was stable with 17 vessels ordered, and for

Aframaxes 39 vessels were ordered as opposed to 63 vessels ordered in 1997. In total, 18.84 million dwt were ordered, which constitutes a decrease of 10.66 million dwt. The orderbook of tankers above 25,000- dwt. now stands at 45.36 million dwt, which is the largest since 1976.

Bulkers: Difficult freight markets generated very little demand for this category of vessel. Only 23 capesize bulkers, 64 panamaxes and 58 handysized bulkers were ordered.

The orderbook of bulk carriers above 10,000-dwt now stands at 25.52 million dwt, down 0.9 mill, dwt from the end of 1997.

Shipyard Order Book (Mill, DWT)

Yr. Tankers Bulk Comb. Others Total carr. car. 89 16.6 12.6 0.1 7.7 37.0 90 23.3 15.3 0.7 8.7 48.0 91 39.1 9.3 2.6 9.0 60.0 92 38.4 15.3 1.9 11.4 67.0 93 29.5 16.0 0.5 13.5 59.5 94 23.6 21.0 0.2 17.3 62.1 95 24.8 27.0 0.2 14.0 66.0 96 19.1 31.8 0.7 15.3 66.9 97 20.2 27.1 0.5 18.3 66.1 98 41.7 26.4 0.4 14.5 83.0 99 45.4 25.5 0.4 13.7 85.0 source: The Platou Report

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