French orders to foreign shipyards

62
100
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0
Jan 94
US$/MT
Apr 94
Jun 94
Sep 94
Dec 94
Mar 95
In all, forty-six new ships were ordered this year, rather
meagre sales for shipbuilders, whose building prices are
nonetheless at rock bottom. Another factor influencing
the strong growth in the fleet is the near total absence of
scrapping; only five vessels displacing a total of 0.1 million
tons went to the scrapyards in the first ten months of the
year, despite the bad freight market. In 1997, eight vessels
were scrapped and only three in 1998.
It is improbable that scrapping will increase massively
over the next six months, but even if it were to occur, the
world fleet would continue to grow in 2000. Current
projections indicate fleet growth at 9% this year and
shipowners will have to wait for 2001 or 2002 before
observing a substantial slowing of the supply of new
ships. It is interesting to note that the largest shipowners,
in an effort to compensate for the overall weakness of
the market, are continuing the trend of associations,
mergers and the purchase of smaller well-established
niche markets operators.
Simultaneously, we are witnessing large-scale mergers
involving the big petroleum and chemical groups, including
Mobil/Exxon, BP Amoco/Arco and TotalFina/Elf. With this
type of shuffling occurring and showing little sign of
abating, the future will be marked by progressively fewer
players in both the shipowner and charterer areas.
The chemical and small product carrier
second-hand market
May 95
The chemical carrier second-hand market was also in the
doldrums. The total number of transactions recorded in
1999 was between 30 and 35 units, including small refined
product carriers. This represents, in terms of number of
sales, a decrease of 30% on 1998 and 50% on 1997.
Another feature of this market is the near total autonomy
between Far East and Europe/US markets. Only two
Aug 95
Nov 95
Feb 96
Chemical tanker freight rates
2000 MT easy chemical spot
Apr 96
Jul 96
Oct 96
Jan 97
Apr 97
Jun 97
Sep 97
Dec 97
Mar 98
May 98
Aug 98
Rotterdam - WC Italy
Rotterdam - US Gulf
Rotterdam - Taiwan
Far Eastern-owned vessels were sold to European buyers.
These were:
• “Pancon Ace” (7,000 dwt, built in Japan in 1985, coiled
and epoxy coated), sold to Greek buyers for $2.5 million.
This figure is about 30% lower than levels recorded at the
end of 1998 for vessels of a like age and specification.
It is 50% lower compared to 1997 prices. This vessel
type - a single hull 6/7,000 dwt, epoxy coated and coiled,
built and operated by Japanese or Korean entities - drew
particularly low prices. Examples of this class include
“Hakko Venus”, for $2 million, “Sunny Diamond” for $1.9
million and as low as $1.7 million for “Sino Kin”. All these
vessels were built in 1983 and have been sold within Asia.
• “Crane Cosmos” may also be cited (7,700 dwt, built in
Japan in 1991, stainless steel/zinc/epoxy coated, single
hull), sold to clients of Chembulk for around $8 million.
The remaining deals were all conducted within closed Asian
or Euro-American shipowner circuits, with no intermingling
of the two markets.
The main reason behind this trend is that quality standards
are progressively becoming more divergent, with gaps
widening as more stringent vetting standards are put in
place. The trend is in contradiction with a growing attraction
felt by European shipowners - especially Scandinavians -
for sophisticated vessels ordered in the Far East, especially
in China.
Another factor behind this morass is the consolidation
bias currently affecting the petrochemical industry, that
is orienting the market towards an industry structure
that is becoming ever more limited in terms of the number
of actors and competitors.
The eliminating of single hull vessels that have reached
their 25th year of operation continues to put down any
vague attempts to conclude second-hand sales.
Nov 98
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Oct 99