RA BRS 2003 GB >pdf

SHIPPING
AND
SHIPBUILDING
MARKETS
2003
Shipbrokers since 1856

SHIPPING
AND
SHIPBUILDING
MARKETS
2003
The BRS annual review of world shipping
and shipbuilding developments in 2002
and prospects for the coming months…
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1 Foreword
3 The shipbuilding market in 2002
17 The cruise market in 2002
23 The tanker market in 2002
37 The offshore market in 2002
45 The chemical carrier market in 2002
49 The liquefied petroleum gas shipping market in 2002
57 The liquefied natural gas shipping market in 2002
65 The dry bulk market in 2002
75 The containership market in 2002
85 The ro-ro market in 2002
89 The reefership market in 2002
95 The marine insurance markets in 2002
99 French shipyards deliveries and orderbook in 2002
102 French orders to foreign shipyards in 2002

Once again we are outraged and helpless
spectators of a massive oil pollution on
the Atlantic seaboard with serious consequences
to all coastal livelihood : fishing, oyster
farming, tourism, etc.
Faced with such a wasteful tragedy, the media
has blasted off at the shipping industry, and elected
representatives - local, regional or national –
justifiably are trying to transform their indignation
into rapid and salutary actions.
Unfortunately the sea imposes a certain humility
and the simplistic debates do not resolve the
complex realities, be they technical, economic or
financial.
Technically, first of all, it is worth repeating again
that an old ship is not necessarily a dangerous
ship if she has been well maintained, and that a
double-hull vessel could prove to be an efficient
WORDS
AND
FACTS
solution in the specific case of ship running
aground or a collision at slow speed, but there
are also some foreseeable concerns given the
increased difficulties of inspection and maintenance.
It is therefore by controlling ships in ports
and by tightening classification standards that
efforts should be directed in order to eliminate
the black sheep from the seas.
Economically it is not possible to eliminate the
total fleet of single-hull tankers before 2010,
which still comprises some 2,000 units. Neither
the scrapyards nor the shipyards are able to keep
up with such a replacement pace.
In addition it would undermine the tenor of international
conventions, which have laboriously
been drawn up and signed under the aegis of the
IMO, which it should be remembered is part of
the U.N. – behind which Europe is happy to stand
in other matters.
BRS - Foreword
1

And finally financially, shipping requires heavy
investment, which can only be entertained within
a well-defined general framework.
To cut short prematurely the life span of a ship, to
remove the ceilings of insured, and to eliminate
the trading in some economic zones would inevitably
lead to the insolvency of numerous owners.
What is necessary is neither a lax nor a lenient
attitude but rather a strict application of all the
controls, rules and regulations currently in place,
which all lead to the improvement in the quality
of the fleet and thus reduce the risk of accidents.
It is worth restating that shipping accounts for
over 90 % of the world transport needs and that
it remains the safest and the least polluting
means of transport. Over the last twenty years,
shipping pollution in the form of oil spills and
waste has been reduced tenfold. Whilst it is still
too much, the improvement should nonetheless
be recognised.
Let us not adopt a NIMBY attitude (“not in my
back yard”) which is a good illustration of the
paradox between the generous theorising and
the egotistical individualism, which permitted the
Spanish to send the ‘Prestige’ out to a raging sea
to sink at a depth of 3,500 meters, thus making
uncertain any pumping solution and consequently
causing the coastline of three countries to
become polluted for a prolonged period.
In the same vein, Europe, by closing off its ports
too quickly to the so-called dangerous ships is
simply displacing them to less developed or less
demanding economic areas.
The European Atlantic zone is unfortunately one
of the busiest shipping axes and as “zero risk”
does not exist at sea, it is necessary in addition to
preventive measures also to put in place efficient
remedial measures that in our opinion can only
be European.
We should have the courage to immediately assign
along the coastline certain ports or “refuge”
zones where any pollution can be properly
contained and pumping carried out. Such a decision
can only be taken at the highest national
level, or even European, as it is clearly not reasonable
to place such a responsibility on local or
regional representatives.
At the same time indemnities should be fairly and
quickly distributed. Why not form a European fund
complementary to FIPOL, which could be financed
through a tax on the consumption of oil products,
as it is not in holding the charterer, shipowner or
the owner of the cargo liable beyond all reasonable
and insurable limits, that such an amount
will be found ? If this were to be the case, all the
serious and financially solvent players would then
disappear from shipping and give their place to
irresponsible owners, both in the literal and figurative
sense. The ‘Prestige‘ is a case in point.
The ‘Erika’ tragedy has accelerated the rejuvenation
of the fleet. Let us hope that the ‘Prestige’
will only help accentuate the movement, and
whilst we can all be pleased with this trend it is
not enough in itself.
In France, the new government is to be thanked
for its efforts to listen and pay serious attention
to shipping problems, which had been ignored
for some time. The tonnage tax, which already
exists in several European countries, has been
passed at the end of 2002 and a think-tank is
currently looking at the question of French flag
and European short-sea developments. We hope
that this will prove fruitful with the assistance of
all concerned parties.
Players in the shipping world are by an overwhelming
majority serious, competent, and concerned
to preserve our maritime environment. Rantings
and ravings, and sterile theorising do not help to
advance one of the most wondrous of causes,
that of the sea. ■
2 BRS - Shipping and Shipbuilding Markets 2003

THE
SHIPBUILDING
MARKET
IN
2002
The year 2002 was marked by:
1. A large drop in the volume of orders in the first
half, giving the impression that the world orderbook
was going to be reduced significantly for the first
time since 1993. An important recovery takes place
however during the second half and more particularly
in the fourth quarter, notably in Japan but also
in Korea, to such an extent that the world orderbook
ended the year against all expectations on an
increase over 2001 with more than 75 million tons.
2. Korea confirms its place as the leading shipbuilding
country with an orderbook of about 31 million
gt, followed by Japan with nearly 25 million
gt. Shipyard mergers take place in these two countries.
Chinese shipbuilding is still on a rising trend
with a total of 9.1 million gt on order reached at
the end of 2002. Yards continue to expand with
the opening of new docks despite a global overcapacity
in the market. European shipbuilding is
struggling to keep up with a modest 6.24 million
gt on order against more than 8 million gt at the
beginning of the 90’s. The number of orders in
sectors where it is traditionally strong (ro-ros ships,
ferries, cruise ships) remains weak and it is neither
taking advantage of the revived demand in chemical
carriers, which substantially benefits to
Japan, nor of the sustained level of orders for LNG
carriers. Lays off and closures are being announced
and some shipyards go bankrupt.
3. Newbuilding prices continue to drop in the first
half of the year up until the autumn. These reductions
(up to 15 % when compared to 2001) are
not evenly spread and depend on the type and size
of ship as well as the level of competitiveness between
the shipyards. It is very noticeable whenever
demand is weak (containerships and large-size
tankers) and less so for bulk carriers. At the beginning
of the autumn, prices for these big ships start
to increase with the recovery in demand.
The Shipbuilding Market in 2002
3

IMF Forecast (in GNP %)
4
Shipping and Shipbuilding Markets 2003
4. The sinking of the ‘Prestige’, a 26 years old
single-hulled tanker which was carrying 77,000
tons of heavy fuel oil, created a new dramatic oil
spill, the third in less than four years in European
waters, after those of the ‘Erika’ (December 1999)
and the ‘Baltic Carrier’ (April 2001). Following the
initial declarations of European politicians calling
for a tightening of regulation, numerous owners
rush at shipyards to negotiate early deliveries.
These collective requests induce price increases in
the order of 5 to 10 % compared to the lowest
levels of the year.
◆ ◆ ◆
With a world GNP increase around 2.8 %, the year
2002 remained a year of little economic growth. It
is nonetheless slightly better than 2001, which had
a GNP rise of 2.2 %, one of the lowest in the last
ten years.
World USA Japan E.U Korea China
2001 2.2 0.3 -0.3 1.6 3.0 7.3
2002 2.8 2.2 -0.5 1.1 3.2 7.5
2003 3.7 2.6 1.1 2.3 5.9 7.2
IMF - September 2002
World trade growth has expanded in 2002 by
nearly 3 % whereas in 2001 it had been flat.
Freight rates in the three principal mainstays of the
shipping market, oil, dry bulk, and containers,
which had dropped considerably in 2001, stabilise
Index 1,000 = Jan. 98
3,500
3,000
2,500
2,000
1,500
1,000
500
0
Jan 98
Apr 98
Jul 98
Oct 98
Jan 99
Apr 99
Jul 99
Freight rates evolution since 1998
Containership 1,700 teu
Baltic Dry Index (BDI)
VLCC 250,000 t MEG/Japan
Oct 99
Jan 00
Apr 00
%
14
12
10
8
6
4
2
0
2000
at the start of the summer and go back up as from
September 2002.
Nonetheless, the economic climate, weak freight
rates, a hazy visibility and international tensions
have a combined effect and help deter owners
from the shipbuilding market during the first half
of the year up until the autumn.
Low shipbuilding prices no longer seem to be sufficient
to incite potential buyers. Shipyards, whose
orderbooks go through up until 2004 or even
beyond, are not convinced either they should
lower their prices in order to stimulate this new
demand, which would allow them to balance their
orderbooks and to reach their commercial objec-
Jul 00
Oct 00
Jan 01
2001
Apr 01
General trends
Jul 01
Oct 01
Jan 02
2002
Apr 02
World GDP
World trade
Jul 02
Oct 02
2003

tives set at the beginning of the year. Such is the
case that the volume of new orders shrinks to the
point that in September the world orderbook falls
below the 70 million tons mark.
This drop in the volume of orders during the first
three quarters affects principally Europe and
China. Japan which is largely specialised in the
building of dry bulk carriers, is able to profit from
% dwt of fleet on order
30
25
20
15
10
5
0
1990
1991
1992
1993
1994
1995
1996
the new interest in this sector linked to renewal
needs, given the very low level of Capesize and
Panamax orders. Japan notches up more new
New orders during the year
Percentage of the active fleet on order by type
1997
1998
Oil Tanker
Bulk
Containership
1999
2000
2001
2002
Bro Ellen
37,300 dwt Product
& Chemical tanker,
blt 2002 by Treci Maj,
owned by Broström
Tankers S.A.
(million dwt) 1999 2000 2001 2002
Tankers > 25,000 dwt 12.4 34.6 25.0 19.9
Bulkers > 15,000 dwt 21.9 17.6 7.7 21.6
Containerships > 1,000 teu 7.0 13.7 7.1 7.4
The Shipbuilding Market in 2002
5

6
dwt
18,000,000
16,000,000
14,000,000
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
Newbuilding prices variations (in million US$)
Shipping and Shipbuilding Markets 2003
0
53
17 16
VLCC Suezmax Aframax Panamax MR Products Capesize Panamax Handysize Containership
tankers
(above 1,000 teu)
orders than Korea, which is more focused on building
containerships and tankers.
In the autumn, the increase in freight rates linked to
shipbuilding prices at historic lows helps provoke a
very strong demand, to such an extent that the
world orderbook finished the year at a level higher
to that of 2001.
In 2002, we enter into a new cycle for bulk carriers
with a very strong demand for Capesize (50 units
ordered which is the most in the decade) and Panamax
(no less than 75 units ordered whereas the
orderbook for this type of ship in July 2002 had fallen
to 49 units). But 2002 is also marked by a strong
demand for Aframax tankers (44 units ordered).
Within specialised tonnage, there is a strong interest
for chemical tankers (54 stainless steel units were
ordered), after two years of weak demand. Orders
for ferries and ro-ros are limited and correspond to
needs for renewing. Car carrier orders remain steady
but important renewal programmes are launched
by Japanese operators NYK, Mitsui and K Line.
4Q 2000 4Q 2001 Oct. 2002 End 2002 1992
Tankers VLCC 78 70 63 66 101
Suezmax 52 45 43 45 64
Aframax 41 36 33.5 36 50
IMO II 45,000 dwt 29 26 26.5 29 33
Bulkers Capesize 40 36 35 36 47
Panamax 23 20 20.5 21 30
Handymax 21 19 18 19 25
44
21 18
Standards vessels contracting 2000-2001-2002
65
82
44
2
33
46
106
130
94
28
19
50
64
22
76
2000
2001
2002
There is little interest for LPG carriers: only 7 new
contracts are sealed exclusively with Japanese and
Korean yards. Freight rates in this sector have never
been so low and the number of idle ships weighs heavily
on the market. Ordering activity for LNG carriers
has remained healthy with 16 new contracts concluded,
which is the third best figure for the decade.
Cruise ship operators are sitting on the fence : only
3 cruise ships are ordered in 2002, which is far from
the 25 contracts of 1999. New investments are
hoped for in 2003.
As previously indicated, a significant drop in prices
was experienced in 2002. Ships least in demand
and being normally ordered in series like large
containerships, gave rise to a fierce competition
between shipyards resulting in important rebates
(-15 %) ; the same applies to VLCC (-10 %) which
still carry a considerable attraction for shipyards.
It seems that a floor price was reached at the beginning
of the autumn. Shipyards revises their prices
upwards due to the strong recovery in demand,
brought about by improved freight rates but also by
the anticipation of tighter regulation following the
‘Prestige’ disaster (November 2002). In practice, the
first declarations by politicians from countries affected
by the pollution, calling for an accelerated phasing-out
of single-hull tankers or to forbid singlehull
tankers to carry heavy fuel oil in European
waters, was enough to incite some tanker owners
to negotiate with builders for new tonnage, leading
to price increases at the end of the year.
203
73
169
315
159 137

Nb of vessels
60
50
40
30
20
10
0
This price hike could well carry through into 2003 in
the light of the desire by authorities to tighten existing
controls and to put them into immediate effect. This
will depend equally on the recovery of the economic
growth, which is continually getting postponed.
Japan
At the end of the year Japan boasts an orderbook
of 25 million gt, its best performance since the oil
shock of 1973. It may be recalled that in 1973
m.gt/m.$
120
100
80
60
40
20
0
1990
484,425
262,100
939,050
Chemical carriers
(dwt)
1991
Japan recorded 33 million gt of new orders and that
in 1974 the Japanese orderbook stood at 50 million
gt, out of a world total of 120 million gt.
The level of orders contracted in 2002 surpasses 12
million gt according to the statistics of the Japanese
Shipbuilders Exporters Association (JSEA). Japanese
shipyards sign contracts for 201 bulk carriers,
more than double last year’s figure. Japan also
manage to secure 9 out of the 16 orders for LNG
carriers in 2002 whilst Korea succeeded in securing
20 out of 27 last year.
World orderbook growth vs newbuilding prices decrease since 1990
1992
922,850
830,500
341,600
LPG carriers
(cbm)
1993
Specialised vessel contracting 2000-2001-2002
2,485,000
LNG carriers
(cbm)
1994
3,601,700
2,209,100
1995
487,444
119,353
Ferries
(grt)
1996
371,600
1997
276,500
118,072
Ro-ro
(dwt)
90,100
1998
VLCC newbuilding price (m.$)
Capesize newbuilding (m.$)
World orderbook (m.gt)
1999
105,595
63,059
163,450
Car carriers
(cars)
2000
2000
2001
2002
1,427,200
Cruise vessels
(grt)
2001
58,600
228,000
2002
The Shipbuilding Market in 2002
7

8
US$
1.40
1.35
1.30
1.25
1.20
1.15
1.10
1.05
1.00
0,95
0,90
0.85
0.80
Jan 01
Feb 01
Mar 01
Shipping and Shipbuilding Markets 2003
Apr 01
May 01
Jun 01
Its market share increases, going from 25 % to
nearly 32 % of the world orderbook.
Once again, Japanese builders are able to take
advantage of the weakness of the yen compared
to the dollar. The Japanese currency goes over 135
yen/$ in January before appreciating to 115 yen/$
in July.
On October 1 st 2002, NKK and Hitachi merge their
shipbuilding activities by creating Universal Shipbuilding
Corporation (USC) and initiate the way to
the first major restructuring of shipbuilding in
Japan. At a time when it is important to be large
enough to benefit from economies of scale, USC
becomes the second largest shipbuilder in Japan
with Imabari, behind Mitsubishi Heavy Industries.
IHI and Sumitomo Heavy Industries formed IHI Marine
United in October 2002.
Kawasaki Heavy Industries makes their shipbuilding
an affiliated company, which could allow mergers
with other shipyards in the near future.
South Korea
In 2002, Korea keeps its first place as world shipbuilder
with 31 million gt. They announce to have
exceeded $10 billion in exports in 2002, 33 years
after having delivered their first contract, a fishing
boat to a Taiwanese owner.
New orders reach 13.7 million gt this year against
close to 11.5 million in 2001, despite a substantial
Jul 01
Aug 01
Average exchange rates with the US$
Sep 01
Oct 01
Nov 01
Dec 01
Jan 02
Feb 02
Mar 02
Apr 02
May 02
Jun 02
drop in the first three quarters of the year when
compared to the previous year. This performance
was made possible thanks to the tripling of orders
in the fourth quarter, according to the statistics
given by the Korean Ministry of Commerce, Industry
and Energy (MOCIE). Orders placed in November
and December alone represent 44 % of the
total demand for the year, according to the same
source.
Korea reinforces its position in sectors, which it has
recently targeted. 54 of the 94 shipbuilding
contracts for product tankers (MR) made in 2002
were done in Korean yards, and likewise for 16 out
of 18 Suezmaxes.
During the last quarter 2002, Korea was able to sign
up for 21 containerships over 5,000 teu (41 out of
an annual total of 51), of which the first ships
having an official capacity of more than 8,000 teu.
On January 1 st 2003, Samho Heavy Industries, ex
Halla, changed its name to become Hyundai
Samho, after having been taken over by Hyundai
Heavy Industries in March 2002. This new entity
now comprises three sites for shipbuilding: Hyundai
Heavy Industries, Hyundai Mipo, and Hyundai
Samho that consolidates its position as the world’s
largest shipbuilder.
China
The volume of new orders significantly progressed
in 2002 by 22.9 %, despite a slow start to the year
Jul 02
100 yen
1,000 won
1 euro
Aug 02
Sep 02
Oct 02
Nov 02
Dec 02

%
100
90
80
70
60
50
40
30
20
10
0
and the orderbook for Chinese yards increased
from 7.4 million gt at the end 2001 to about 9.1
million gt one year later.
Expansion projects are nonetheless being pursued.
To the 6 existing VLCC docks, the following should
be added:
◆ Dalian New Shipyard (DNS) : a new dock (total
two)
◆ Dalian Shipyard: one dock
◆ Qingdao: four docks (two for newbuilding and
two for repairs)
In comparison, Japan and Korea have respectively
nine and twelve VLCC docks.
DNS and NACKS have each delivered their first
VLCC this year, respectively to NITC and COSCO.
Shipbuilding countries market shares evolution for tankers
Sep 98 Dec 98 Mar 99 Jun 99 Sep 99 Dec 99 Mar 00 Jun 00 Sep 00 Dec 00 Mar 01 Jun 01 Sep 01 Dec 01 Mar 02 Jun 02 Sep 02 Dec 02
Hudong-Zhonghua signed an agreement for a
transfer of technology with Chantiers de l’Atlantique
and should be the shipyard finally chosen to
build two LNG carriers (plus an optional three) of
147,200 cbm using the GTT membrane containment
system, which will supply natural gas to the
province of Guangdong. Other shipyards have
shown interest in the building of these ships, such
as DNS, NACKS and Jiangnan – Waogaoqiao which
should also take their share in this domestic market.
The Chinese orderbook increase clearly indicates
their wish to rapidly achieve the 10 million tons
mark, despite the revival of Japanese and South
Korean competition, offering better delivery dates
and benefiting from their excellent reputation.
The fixed parity of the yuan to the dollar could act
as a handicap for Chinese shipyards, compared to
their Japanese and Korean counterparts.
Taiwan
Japan
Korea
Others
The rebirth of the China Shipbuilding shipyard, following
a severe restructuring, has led to a return
to profits. That yard could be privatised in 2003.
Orientor 2
49,400 dwt bulk carrier,
blt 2002 by NACKS,
owned by SETAF S.A.
The Shipbuilding Market in 2002
9

10
%
100
Shipping and Shipbuilding Markets 2003
90
80
70
60
50
40
30
20
10
0
Due to a relatively light workload they were in a
position to take orders for an important number of
large containerships, Capesize and Panamax bulk
carriers.
Europe
New orders are in sharp decline and market share
of European shipyards is slowly being whittled
down, going from over 11 % at the end of 2001 to
8.3 % at the end of 2002.
The striking point lays more in the decline in the
orderbook of European shipyards than that of their
market share. In practice, the former fluctuated
within a range between 8 and 9 million tons right
throughout the 90’s. This year, it went from 8.5 million
tons to 6.2 million tons.
This highlights the huge difficulties of European
shipbuilders when confronted with a fall in prices.
These same yards were able to notch up at the end
of 2000 orders up to 3 years in circumstances much
more favourable than in 2002. They then combined
three advantages:
◆ firmer levels of prices (a better economic climate
and a stronger demand),
◆ subsidies up to 9 % of the sales price,
◆ a more favourable dollar/euro exchange rate in a
market where ship’s values are normally expressed
in dollars.
Overall conditions are quite different today.
Shipbuilding countries market shares evolution for containerships
Japan
Korea
Germany
Others
Sep 98 Dec 98 Mar 99 Jun 99 Sep 99 Dec 99 Mar 00 Jun 00 Sep 00 Dec 00 Mar 01 Jun 01 Sep 01
Dec 01 Mar 02 Jun 02 Sep 02 Dec 02
Demand for specialised ships, which comprises a large
part of European production (cruise ships, ro-ros, ferries,
chemical carriers, LNG carriers) has remained
weak or has been displaced towards Far Eastern yards.
Thus, the major chemical tankers operators like
Stolt-Nielsen or Jo Tankers who ordered series of
ships built in Europe in the 90’s, have turned
towards Japanese shipyards. One should note
however that European yards capable of building
ships of this type are becoming more and more
scarce. A large part of these orders for chemical
carriers fitted with stainless steel tanks have been
placed by Japanese owners, either on long-term
employment with these European operators, or for
domestic account. These chemical carriers have
fewer tanks and segregations and generally speaking
are less sophisticated than the ships ordered
in the 90’s, built by European yards. But the competition
is so intense today that operators are obliged
to reconsider their technical preferences.
Japanese shipyards have been pursuing for a number
of years a path of standardising ships, better
suited for the industrialisation and thus giving a better
control over costs.
Cruise ship operators who made massive investments
in 1999 and 2000 are waiting in the wings.
Only three orders were placed in 2002 after only
one in 2001.
European shipyards, with the exception of one,
have not been able to get orders for LNG carriers
despite a steady demand.

Several European shipyards have gone bankrupt or
are in the process of going into liquidation: in Norway
(Fosen – Mjellem & Karlsen), in Germany (Flenderwerft
– SSW), in Italy (Fratelli Orlando), in Northern
Ireland (Harland & Wolff), with continuation of their
activities or not (Szczesin). Orskov (Denmark) announced
that it will stop its newbuilding activities in the
course of 2003. Others have announced partial
unemployment or lays off to match their orderbooks.
The dispute between European shipyards and their
Korean counterparts is still going on. The Brussels
Commission has finally registered a complaint with
the World Trade Organisation and has proposed to
re-establish, as a temporary means of defence
(awaiting the outcome of this action), subsidies for
shipbuilding up to 6 % for a period of 18 months
starting from October 1 st 2002 for certain types of
ships such as containerships, product tankers and
chemical carriers.
The depreciation of the dollar against the euro of
about 17% unfortunately makes any such aid meaningless
in a market largely dominated by dollar
transactions.
European shipyards know today that they can only
rely on themselves to survive. The strategies being
adopted are various. More and more yards are trying
to keep afloat by sub-contracting the construction
of the hulls to East European countries or to Ukraine
whilst remaining prime contractors and securing
outfitting. Some shipyards like Aker, Damen, A.P.
Moller have even invested in facilities in Romania,
Ukraine or Lithuania. Other shipyards are counting
on military orders (Izar, Fincantieri, HDW).
A further reduction in the production capacity in
Europe is again foreseeable for this year.
France
The shipbuilding orderbook in France has gone from
670,000 tons end 2001 to 464,000 tons end 2002.
Chantiers de l’Atlantique had no orders for cruise
ships in 2002, but got the order for the construction
of a LNG carrier on account of Gaz de France.
This is a first to the extent that the ship’s propulsion
is with a dual diesel gas-electric engine as opposed
to all previous LNG carriers, which are equipped
with steam-turbines. This method of propulsion
offers two considerable advantages to the owner :
important energy savings due to a much lower
consumption and an increased cargo capacity for
the same size of vessel.
Chantiers de l’Atlantique still enjoy a relatively
healthy orderbook which runs through to 2004,
with 5 cruise ships, a frigate for the Royal Moroccan
Navy, and two LPD contracts for the DCN and
the 74,000 cbm LNG carrier. In order to remain
fully employed, new orders will however be necessary
in 2003.
They delivered the following ships this year:
◆ the ‘Constellation’, a cruise ship of 1,950 passengers
to Celebrity Cruises,
◆ the ‘European Stars’, a cruise ship of 1,506 passengers
to Festival Cruises,
◆ the ‘Coral Princess’, a cruise ship of 1,950 passengers
for P&O Princess,
◆ a frigate for the Royal Moroccan Navy.
Alstom Leroux Naval got an order to build a hydrographic
vessel for Ifremer and a 56 m yacht for
American account.
Chantiers Piriou have had orders for:
◆ 2 fast intervention support vessels for Surf,
◆ 1 versatile AHTS,
◆ 1 port tug for Les Abeilles.
Germany
Only two years ago German yards had signed up
for 46 containerships over 1,000 teu, totalling nearly
100,000 teu. In 2002 this figure was divided by
three. The time when Aker-MTW and Kvaerner-
Warnow were taking in orders for ships of 5,000
teu following the example of S.E. Asian yards seems
now very distant.
FS Vanessa
19,117 dwt, blt 2002
by Viana do Castelo
(ENVC), owned by
Fouquet Sacop S.A.
The Shipbuilding Market in 2002
11

Visby
Ropax built by Guangzhou
Shipbuilding International
1,500 pax, 1,600 lane metres
and 29 kn, under successful
sea trials in December 2002,
owned by Rederi AB Gotland.
12
Shipping and Shipbuilding Markets 2003
Shipyards such as Flender Werft, SSW, Thyssen, Lindenau
have registered hardly any significant orders.
Meyer Werft had the two options of RCCL put back
by 9 months, but nonetheless was able to get the
order for a ferry for BAI and a passenger ship for
the Indonesian government. Babcock Borsig sold its
participation in HDW to Bank One Corporation.
This shipyard is still deliberating about keeping its
activity in merchant shipbuilding, given its predominance
in the construction of diesel propelled submarines.
In other matters, Thyssen-Blöhm + Voss
could acquire a 50% participation in HDW in 2004.
The absence of new orders for ro-ros also had its
effect. Deliveries of ferries by German yards are
steadily declining. Six ships of over 15,000 gt were
delivered in 2001, four in 2002, and two units
should be delivered before 2004.
Smaller yards like J.J. Sietas or Peene Werft, specialised
in building multipurpose cargo or heavylift
ships are being hurt by Asian competition.
Italy
Fincantieri was able to sign up 2 of the 3 orders for
cruise ships placed in 2002 and carries an orderbook
for 11 cruise ships whose deliveries extend
through to 2006.
Italian owners have now turned away from their
domestic shipyards and the trend towards orders in
Asian yards has been amplified. More than 30 product
and chemical carriers were placed by Italian
interests with Korean, Chinese, or Croatian shipyards
during the course of the past two years.
Several shipyards are going through difficult times.
Fratelli Orlando has gone bankrupt and is looking
for a takeover bid. Mario Morini was sold to a group
building yachts and could get out of building of
merchant ships. Mariotti and Apuania have not
taken in any new orders. Visentini continues to build
ro-pax for the account of its own fleet operations.
The future is full of uncertainty for Italian shipyards
too.
Spain
The majority of orders placed in 2002 with Spanish
shipyards were for domestic account. It was principally
for ro-ros. At the end of the year, IZAR was in
negotiations with a Venezuelan owner for an order
for three asphalt carriers of 27,000 dwt. IZAR has
succeeded entering the dredging market by importing
technology from Holland and Germany.
IZAR should deliver in 2003 the first of 5 LNG carriers
ordered in 2000/2001 and hopes to carry on in
this niche of the market despite very active Asian
competition.
Finland
The two Finnish shipyards Aker Finnyards and
Kvaerner Masa saw their mother companies merge
in February 2002. Specialised in building ro-ros and
cruise ships, these yards, after no orders in 2001,
signed several contracts at the end of 2002.
Masa Yard won the order for a giant luxurious ferry
of 75,000 gt for the Norwegian group Color Line.
Aker Finnyards got the order for a cruise ship of

%
100
90
80
70
60
50
40
30
20
10
0
Shipbuilding countries market shares evolution for bulk carriers
Sep 98 Dec 98 Mar 99 Jun 99 Sep 99 Dec 99 Mar 00 Jun 00 Sep 00 Dec 00 Mar 01 Jun 01 Sep 01 Dec 01 Mar 02 Jun 02 Sep 02 Dec 02
33,000 gt for Birka Line and a ferry sister to the
‘Romantika’ for Estonian account, 40,000 gt, both
for delivery in 2004.
Denmark
The last large Danish shipyard Odense Lindo continues
its construction of giant containerships, of
which the latest design should approach the
10,000 teu mark. These containerships are then
managed by the shipping arm of the A.P. Moller
group, also owner of the yard. This shipyard has
not had any order for merchant ships this year and
plans for reducing employees are being examined.
Nonetheless there has been a diversification in the
military shipbuilding following an order by the
Danish Navy for two large multipurpose supply
ships. The Orskov shipyard has announced that it
will stop newbuildings in order to concentrate on
ship repairs in 2003.
Holland
Holland is noted for producing small size ships
(generally less than 10,000 dwt). The level of
orders has however been less in 2002 and comprises
multipurpose cargo ships, product and chemical
tankers and dredgers. They are suffering
from a fierce competition from Chinese shipyards
who have plunged into this sector, abandoned by
Korean yards chasing larger size ships, or the Japanese
who are very reluctant to build specialised
ships for the account of non–domestic owners. It is
worth noting that the Bjilsma shipyard got an order
for a 1,300 cbm LNG carrier to handle the distribution
of natural gas on the Norwegian coastline.
Norway
Japan
Korea
China
Others
The significant event in 2002 was the merger of the
two old rivals Aker and Kvaerner giving rise to a
group active in Norway, Finland, Germany, Romania,
Brazil, and the U.S.. The new entity spreads over 12
sites in Europe and employs 13,500 people with a
Rugby League
7,500 cbm LPG carrier,
blt 2002 by Watanabe,
owned by Daishin/Nisshin
and time chartered by Vitol.
The Shipbuilding Market in 2002
13

14
Pourquoi Pas
2,000 dwt
oceanographic vessel,
to be delivered in 2005 by
Chantiers de l’Atlantique,
operated by IFREMER.
Shipping and Shipbuilding Markets 2003
Shipbuilding countries market shares evolution for stainless steel chemical carriers (1997 vs 2002)
7 %
7 %
67 %
19 %
turnover of some 20 billion Norwegian kroners.
A long-standing specialist in the building of ships
dedicated to the offshore oil industry, Norway has
continued to register a satisfactory level of orders,
even though in decline. Seventeen PSV or AHTS
have been ordered in 2002. As a general rule, hulls
for these units are built in Romania before being
towed for outfitting in Norway. It is to be regretted
that the Fosen shipyard, which built the cruise ship
‘The World’ for Residensea, has gone bankrupt.
Poland
Japan
Western Europe
As with their German counterparts, Polish shipyards
suffered from a drastic reduction in containership
orders. The Szczecinska shipyard, despite
having a fairly substantial orderbook, had to declare
bankruptcy since it could no longer meet its
financial obligations. A re-capitalisation took place
and activity continues under the name of Szczecinska
Nowa. Some of the orders placed with the
old shipyard have been cancelled, other renegotiated,
as with the initial order for 8 stainless steel
chemical carriers for account of Odfjell-Seachem,
of which 6 at least have been reconfirmed. The
19 %
Eastern Europe
Others
14 %
2 %
65 %
other big Polish shipyard, Stocznia Gdynia, won an
important order for car-carriers.
Croatia
The Croatian shipyards, which had managed to
conclude an important volume of orders in 2001,
could not offer any early delivery dates, because many
existing options were exercised, and therefore did not
sign this year as many contracts. Some product tankers
orders were however placed for delivery in 2005.
Croatia is also active in the car carriers sector.
Turkey
There has been some revamping within Turkish
shipbuilding, which has become specialised in small
product and chemical carriers (from 3,000 to
15,000 dwt). These shipyards have been able to sell
an important number of units to European operators
by way of direct orders, but also by way of
resales of ships ordered by Turkish interests. Some
10 shipyards are currently active in this market.
United States
The American shipbuilding industry has maintained
its position as number 8 in the world, with
more than a million gt at the end of 2002. Who
could have made such a prediction only several
years ago ?
However as no contract for large size ships was
concluded in 2002, and the American orderbook
also reflects the time it takes to build two series of
tankers of 140,000 and 185,000 dwt, which were
ordered back in the period 1998-2001. The rest of
American production is concentrated on small offshore
units, which are built at a multitude of sites in
great numbers.

Prospects
The 90’s were characterised by a continuous growth
in the worldwide orderbook encouraged by a
continuous drop in newbuilding prices.
After the expansion of Korean production capacity
in the middle of the 90’s then that of China’s currently,
global shipbuilding capacity could expand at
a rate in excess of ship demand in the years to come.
OECD estimates that today’s surplus capacity is
15 % over demand and that it could reach 30 % by
2005, and they would like to see discussions which
were abandoned in 1996 reactivated in an attempt
to make the market healthier.
There is little chance that China will limit its ambitions
and renounce at this stage what it considers
its legitimate market share. Possibly in order to
maintain “reasonable” price levels, Korea and
Japan will try not to transform their gain in productivity
into supplementary production. But nothing
can be taken for granted as the 90’s showed.
It is therefore quite probable, given the chronic
imbalance between supply and demand, that
construction prices will continue to decline in the
years to come, awaiting for the least efficient shipbuilders
to give up and disappear. The world orderbook
is being kept at record levels in 2002, but the
gap between Europe and Asia has widened.
Despite a persistent drop in prices over time,
rebounds are possible as we have seen in the years
1999-2000 or in 2002. There is a ray of hope therefore
for shipbuilders.
This hope can be based on several objective criteria:
1. Safer ships are necessary.
The ‘Prestige’ catastrophe is still in all our minds
and should provoke a renewed examination in our
consciences on the risks of pollution linked to maritime
transportation. It is true that the catastrophe
of the ‘Erika’ led to a renewal of the fleet and a
certain rise in prices, partly linked to a favourable
economic climate.
Regulation should be reinforced, thus contributing
to new investments, initially for oil tankers but also
for dry bulk carriers since for this type of vessel
double-hulls should be required.
A number of charterers are already imposing more
drastic constraints that those being legislated. The
combination of these measures should accelerate
the need for renewals.
2. New ship sizes and new technologies should be
developed.
Delivered to Brodosplit Shipping in 2002, the first of three product
tankers, successfully built by Split Shipyard in Croatia, with
equipment taken over and shipped from original ‘Double Eagle’
project's builder Newport News Shipbuilding in USA.
The last ten years have seen the development of
new sizes in bulk carriers and containerships.
For instance the deadweight of Handysize bulk carriers
has gradually gone from 35,000 to 55,000
dwt, the deadweight of Panamax from 52,000 to
75,000 dwt, and the deadweight of Capesize from
150,000 to 200,000 dwt. The capacity of containerships
have also increased from 4,000 teu to over
8,000 teu.
This trend is probably not finished.
Needs in natural gas should favour orders of LNG
carriers of very large sizes over and above the
147,000 cbm currently. Projects for LNG carriers of
over 200,000 cbm are being studied. The adoption
of dual diesel gas-electric propulsion on this type of
ship should contribute to the replacement of the
preceding generation equipped with steam turbines.
Development of oil exports or of refined products
from cold regions such as the Baltic, the Russian
Arctic and Alaska could also provide future demand
for ice-class tankers.
3. Maritime transportation, remains the least polluting
Despite the catastrophes which are largely covered
by medias and discredit the image of maritime
transportation, this means of transport is the most
economic in terms of energy consumption per ton
transported and therefore the most ecological.
It is also the solution to alternative transport being
both the most economic and the easiest to put into
place, in order to resolve the ever-increasing problem
of congestion of the road network in Europe
but also in other heavily industrialised zones. ■
Bene
46,467 dwt, product tanker,
built in 2002 by
Split Shipyard in Croatia.
The Shipbuilding Market in 2002
15

16
Shipping and Shipbuilding Markets 2003
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THE
CRUISE MARKET
IN
2002
After the drama of September 11, one could
justifiably fear a difficult year for the cruise
market, but very quickly bookings were back,
and the cruise industry showed it was capable of
confronting the worst kind of crisis. Within several
months, bookings were close to their normal levels
and owners were able to foresee a satisfactory year
again, despite an inevitable drop in the net revenue
per passenger.
Cruise ships which avoided distant destinations
were able to re-orientate themselves to shorter
trips closer to their home base, and requiring less
air travel. At the end of the year, the Cruise Lines
International Association (CLIA) published some
reassuring figures: the number of American cruise
passengers should increase from 6,900,000 to
7,400,000 in 2002, a rise of 7 % with a load factor
of 95 %. In Europe and Asia the load factor for the
year should achieve 80 % and 75 % respectively,
with the cruise industry finding it more difficult to
develop the latter market.
The predominant issue in 2002 has of course been
the fight between Royal Caribbean Cruises (RCC)
and Carnival Cruise Lines (CCL) to take control of
P&O Princess. Having started the year before, this
duel should reach a conclusion towards the end of
the first quarter of 2003 with the marriage of CCL
and P&O after having been approved by the European
and American anti-trust authorities.
By wishing to get closer to P&O, RCC might have
provoked CCL into reacting, nonetheless the wisdom
and rationality of such a marriage remains to
be proven, as in comparison to other parts of the
industry we have frequently had reason to question
whether such mergers are necessarily beneficial to
shareholders values, and a stimulus to the development
of the market.
The P&O Princess-CCL group, which will be quoted
on the New York and London stock exchanges, will
of course be the dominant (possibly overbearing)
player in the cruise industry with nearly 50% of the
The Cruise Market in 2002
17

18
Brilliance of the Seas
90,090 gt, blt 2002
by Meyer Werft,
operated by RCC.
Lower berths
30,000
25,000
20,000
15,000
10,000
5,000
Shipping and Shipbuilding Markets 2003
0
13 ships
delivered in 2002
Cruise ships delivered in 2002 and firm orderbook to 2006
13 ships
American market capacity and 43% capacity of the
world market, thirteen different brands, 65 ships
(100,000 lower berths) and a further 18 under
construction (42,000 lower berths).
We have to acknowledge that CCL has up till now
always respected the identity and the personnel of
the merged parties and to date has managed to
succeed in a unique segmentation of the market.
This segmentation of the market has also been a
10 ships
3 ships
Others
Meyer Werft
Masa Yards
Fincantieri
Ch. de l'Atlantique
1 ship
2003 2004 2005 2006
target in the strategy of other companies during the
course of the year:
◆ The creation of « Ocean Village » and of « A’Rosa
» by the P&O group, the first being destined for
a new younger clientele within the English market,
and the second for a more mature and experienced
clientele within the German market.
◆ Similarly, Costa has dedicated the ‘Costa Marina’
to the Germans and RCC has created « Island
Cruises» to operate on the English market at attractive
prices.
These new brand names sometimes have difficulty
in getting established, with potential clients showing
a certain distrust towards a new name and
product, but for owners it allows them to use older
cruise ships, which are facing the competition of
new ships from their parent companies.
After the black year of 2001, no company has gone
into bankruptcy this past year. Notwithstanding,
vessels which have been laid up due to these earlier
bankruptcies have certainly had a negative effect on
both the second-hand and newbuilding markets
which have been extremely calm.
◆ The eight Renaissance ships (700 lower berths)
have had a problem finding interested parties due to
their size and cost, which necessitate finding homes

in the more remunerative sectors of the market. The
P&O Princess group concluded a long time charter
for the ‘R Eight’ to replace the ‘Minerva’ and thus
serve the restricted but profitable cultural cruises.
The same group also took over the ‘R Three’ and ‘R
Four’ to expand its presence in the Pacific, between
Tahiti, New Caledonia, and Australia.
◆ A newly created American cruise company, Oceania,
is proposing to charter two Renaissance ships
to work the American market and the last three
should find their trade within Europe to fulfil the
upper end of some national markets.
◆ The hulls under construction for the American
company AMCV with Ingalls and their outfitting
have found takers with NCL (the Star Cruises
group) who bought at the very favourable price of
$36 million and will have them completed – or at
least the hull of the first-ship with Lloyd Werft in
Germany, the undisputed specialist of passenger
ship conversion.
For the second consecutive year, the orderbook has
hardly expanded, with the exception of two ships
ordered by the Carnival group with Fincantieri, one
unit of 85,000 tons, 1,848 lower berths, for Holland
America Lines, with delivery in mid-2006, and
one unit of 110,000 tons, 3,000 lower berths, for
Carnival, for delivery at the end of 2005, at the respective
prices of some 380 and 460 million euros.
Fincantieri thus confirms its lead position amongst
European shipbuilders.
Also worth noting is the order by the Scandinavian
company Birka for a vessel of 700 cabins with Aker
Finnyards, at a price of $155 million, destined primarily
for cruise seminars.
At the end of the year, the firm orderbook stands at
27 ships with a capacity of 57,164 lower berths,
with delivery to be spread out over the next three
years, which will increase berth capacity in service
respectively by 10.8% in 2003, 9.5% in 2004, and
2.5 % in 2005.
Confronted with a demand which most probably will
increase at the rate of some 8% per year, the threat
of surplus capacity seems to be receding, which will
reassure bankers and financial analysts who have
been concerned at the rapid rise in the number of
ships joining the market these last years. However
this brutal reduction in new orders puts the future of
the large European shipyards specialised in the cruise
industry into jeopardy. Converting towards other
types of ships, such as ferries, ro-ros, LNG carriers
and military or specialised craft, although a logical
solution, is not always obvious in such a generally
sluggish market. The first victim of this reduced activity
has been the small Norwegian shipyard Fosen,
builder of the ship ‘The World’ for Residensea, which
had to ask for creditors’ protection.
Several projects are currently under discussions,
namely for Star Cruises, Saga, Aida Cruises, Radisson,
Disney Cruises, etc. but are slow to get confirmed.
RCC has not placed any new order in 2002
and is questioning the size of future ships, in view
of the success of the ‘Voyager’ series, 137,000 tons.
It is also a fact that decisions were on hold awaiting
the outcome of the merger with P&O Princess. RCC
has extended its option until September 2003 that
it has with Meyer Werft for two ships of the ‘Serenade’
class (85,000gt, 2,000 lower berths), for delivery
in 2005 and 2006, whereas P&O were unable
to postpone any further its two options with Chantiers
de l’Atlantique.
The market will from now be obliged to follow the
development pace of the new giant CCL/P&O Princess.
It is very unlikely that the year 1999, which
had 25 new orders will be repeated, but one can
reasonably hope that some new orders will be placed
in 2003 by the big groups who will pursue a
more modest rhythm for their expansion in 2005
and beyond. Carnival should logically show the way
and be followed by its competitors, but the number
of new orders risks being insufficient for the appetites
of the European shipyards.
Europe has a total construction capacity of about
fifteen ships of 90,000 gross tons per year, certainly
greatly oversized relative to the needs for a
European Stars
58,600 gt, blt 2002 by
Chantiers de l'Atlantique,
operated by Festival Cruises.
The Cruise Market in 2002
19

20
Carnival Legend
88,500 gt, blt 2002
by Kvaerner Masa,
operated by Carnival.
Shipping and Shipbuilding Markets 2003
reasonable growth of the cruise industry in the
coming years. A reduction in capacity will consequently
have to take place, resulting in a shrinking
of orders and in the number of owners, and of a
greater sensitivity from financial institutions and
investors towards this sector - always hungry for
funds. The depreciation of the dollar against the
euro will also act as a brake, despite the historically
low levels of interest rates.
In this situation competition between shipyards is
fierce, and since national subsidies have been banned
by Brussels, and the negotiating margins on
prices remain very slim, it is more on financing
know-how and means of tax leverage developed
by some E.U. countries, that efforts will be
concentrated.
The only satisfaction is that the construction of cruise
ships should remain an European speciality for
numerous years to come, since Asian shipyards
have no interest to break into this high risk and very
restrictive market, whilst they are experiencing healthy
orders of standard ships. The dramatic and costly
fire of the ‘Diamond Princess’ under construction
with Mitsubishi should also be a dampener.
Thirteen ships were delivered this year:
◆ For Carnival Cruise Lines, the ‘Carnival
Conquest’, (110,000 gt, 2,974 lower berths) built
by Fincantieri, the ‘Carnival Legend’, (88,500 gt,
2,114 lower berths) built by Kvaerner Masa.
◆ For Holland America Line, the ‘Zuiderdam’
(85,000 gt, 1,848 lower berths) built by Fincantieri.
◆ For Royal Caribbean Cruises, the ‘Brilliance of
the Seas’, (90,090 gt, 2,100 lower berths) built by
Meyer Werft, the ‘Navigator of the Seas’,
(137,300 gt, 3,138 lower berths) built by Kvaerner
Masa.
◆ For Celebrity Cruises, the ‘Constellation’,
(91,000 gt, 1,950 lower berths) built by Chantiers
de l’Atlantique.
◆ For P&O Princess Cruises, the ‘Star Princess’
(108,806 gt, 2,600 lower berths) built by Fincantieri,
the ‘Coral Princess’, (88,000 gt, 1,950 lower
berths) built by Chantiers de l’Atlantique.
◆ For Aida Cruises, ‘Aida Vita’, (42,289 gt, 1,266
lower berths) built by Aker MTW.
◆ For Norwegian Cruise Line, the ‘Norwegian
Dawn’, (91,000 gt, 2,244 lower berths) built by
Meyer Werft.

◆ For Festival Cruises, the ‘European Stars’,
(58,600 gt, 1,506 lower berths) built by Chantiers
de l’Atlantique.
◆ For Residensea, ‘The World’ (40,000 gt, 616
lower berths, 110 apartments, 88 suites) built by
Fosen.
◆ For Royal Olympic, ‘Olympia Explorer’,
(25,000 gt, 836 lower berths) built by Blohm &
Voss.
The second-hand market was extremely quiet.
Several significant sales noted were:
◆ ‘Patriot’ (built in 1983, 33,000 gt, 1,250 passengers)
this ship which was the former ‘Niew
Amsterdam’ was bought by Carnival following the
AMCV bankruptcy in May and resold to Louis
Cruises in Cyprus against a ten year time-charter,
which puts a value on the ship of about $65 million.
◆ ‘Victoria’ (built in 1966, 29,000 gt, 778 passengers)
this ship which belonged to P&O, was sold for
$17 million, with a seven year time-charter to a
German tour operator.
◆ ‘Pacific Princess’ (built 1971, 20,000 gt, 640
passengers) was sold for $15 million to Pullman
Tours, who confirm their place as leader in the Spanish
market.
◆ ‘Switzerland’ (ex ‘Daphné’, built 1955,
15,000 gt, 500 passengers) was sold for $2.5 million
to Majestic International Cruises.
The second-hand market is getting smaller but it is
worth mentioning that ships of good standing always
find buyers at a fair value and if it is true that many
ships are potentially for sale, their lack of success is
often attributable to an excessive asking price. The
oldest ships and steam turbines fitted ones should
definitely disappear from the market.
With over a billion dollars net profit for a turnover
of $4.4 billion, Micky Arison chairman of Carnival
could legitimately express his satisfaction on the
development of his company over the course of the
year, but also on the resilience of the cruise market
in the face of the serious geopolitical events which
the world is currently experiencing.
Strangely and unexpectedly, it is not so much terrorism
which troubles cruise operators at the end of
the year as much as the spreading of viruses aboard
their ships, causing some discomfort but without
serious repercussions to passengers. This was given
widespread publicity by the American media always
in search of something sensational. Let us trust that
owners will quickly be able to wipe out this invisible
problem.
Our confidence in the growth of the cruise industry
remains firm, even and above all if, as we have
already stated, the pace of newbuildings slows
down significantly. The trend towards company
mergers is on the other hand certainly not finished,
since outside certain marginal niche products, a critical
mass is necessary in order to operate a company
with a certain serenity, to be able to cope with
political uncertainties and the whims of the tourism
industry as well as the commercial domination of
the Carnival group. ■
Coral Princess
88,000 gt, blt 2002
by Chantiers de l'Atlantique,
operated by P&O Princess.
The Cruise Market in 2002
21

22
Shipping and Shipbuilding Markets 2003
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Information Department
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This Department handles the information reports, analyses,
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The Research and Information Department also offers its
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expertise available to the shipping world to assist and answer
any queries.
You can reach this service directly
at the following address:
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Or through your broker.

THE
TANKER
MARKET
IN
2002
We tried to conclude our last year’s report
on an optimistic note by arguing that
only a significant economic recovery in
the industrialised countries could reverse the
strong downward trend in freight rates. The repercussions
of what we can qualify as after ‘Erika’
were of a very short duration. The drastic policies
put into effect by the main charterers and importing
countries, rejecting the older vessels, brought
in their wake two fierce reactions, which combined
to weigh heavily on freight rates.
Numerous (too many?) new orders were placed
over the past 3 years. As we shall see later all sizes
were affected, and despite a progressive elimination
of the older units, real requirements and replacement
projections have often been surpassed.
Faced with a constant fall in crude oil prices, OPEC
members reacted by reducing their production
quotas often by substantial proportions. Apart
from a few rare exceptions, it has become obvious
Crude oil transport
that the world economic climate remains stuck in
a prolonged state of apathy. Hopes of a recovery
in the second half of the year, which we alluded
to, were not achieved and the prospects are far
from rosy.
GDP as expressed in %
2001 2002 2003
United States 0.3 % 2.2 % 2.6 %
Japan -0.3 % -0.5 % 1.1 %
Europe 1.6 % 1.1 % 2.3 %
Source IMF : September 2002
The past year has also been marked by a particularly
tense climate in the realms of international
affairs. The psychosis of terrorist attacks following
the horrors of September 11 2001 has not abated,
and 2002 has seen its share of bloody events. Closer
to us, the attempt which was made on the
‘Limburg’ demonstrates that our activity is an easy
and symbolic target for the terrorists.
The Tanker Market in 2002
23

24
US$/day
100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
Shipping and Shipbuilding Markets 2003
0
Jan 00
Feb 00
Mar 00
May 00
Caught up in this turmoil, which is both geographical
and economic, the U.S. has thrown down
the gauntlet against these invisible adversaries by
rearranging a part of the reality and in targeting
once again Saddam Hussein and Iraq.
The threat of such a new conflict has had strong
repercussion in the oil industry and oil prices have
swung erratically going from under $20 per barrel
in January to near $30 per barrel in September.
The development of freight rates
over the year
Generally, as shown in the tables, the drop experienced
in 2001 was accentuated to the mediocre
levels of 1999. As will be seen from the analysis
of the different graphs for each of the main sectors,
whilst rates collapsed in the first 3 months
of the year, there was a strong rise in the last
quarter.
Several factors explain this abrupt and unexpected
phenomenon:
◆ The threats directed at Iraq have resulted in a
substantial increase in strategic reserves.
◆ This is the traditional period of the year when
consuming countries build up their stocks in preparation
for a cold winter.
◆ At the same time, producing countries have
significantly opened their taps and have exceeded
their self-imposed quotas. Consequently in the
period October – November, OPEC production
(1) Including conversions
June 00
July 00
Sep 00
Oct 00
Dec 00
Jan 01
VLCC tanker freight rates
Average earnings
Feb 01
Apr 01
May 01
June 01
Aug 01
Sep 01
250,000 t MEG/Japan - TCE
275,000 t MEG/Continent - TCE
260,000 t Forcados/Loop - TCE
Nov 01
Dec 01
Jan 02
Mar 02
touched 26.6 million bpd, a surplus of 2.5 million
bpd over the official ceiling.
The question that we will examine after an analysis
by sector is to know whether this breathe of
fresh air, which owners have enjoyed at the end
of the year, has a chance of being extended and
confirmed, or whether it is simply a short-lived
illusion.
The catastrophe of the ‘Prestige’ nearly three years
after that of the ‘Erika’ and its consequences, will
help to highlight some of the parameters and
conclusions, which we shall try to draw from all this.
VLCC
Particularly sensitive to the uncertain climate we
are currently experiencing, this category of tankers,
with the exception of the fourth quarter, had a very
difficult year. The export restrictions imposed by
the Gulf producing countries, together with a high
level of new deliveries, resulted in an imbalance of
supply and demand particularly detrimental to
owners. Voyage returns continued to plummet to
reach in certain cases levels lower even than those
in 1999… ($5,000 to $6,000 per day).
Given these circumstances and without any expectation
of an economic recovery in the short term,
many owners of older vessels decided not to hold
on, and sent their units to the scrapyards. A total
of 41 VLCC / ULCC (1) were taken out of the fleet
in 2002 compared to 40 in 2001 and 29 in 2000.
Apr 02
June 02
July 02
Aug 02
Oct 02
Nov 02
Dec 02

US$/day
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
Jan 00
Feb 00
Mar 00
May 00
June 00
July 00
At the same time, 40 new vessels were delivered
in 2002, thereby balancing the fleet withdrawals.
Nonetheless we have been able to observe that
the increase in voyage demand at the end of the
year has had an immediate effect on rates, and
shows the very fine balance between supply and
demand with Worldscale rates doubling within a
few weeks!
Thus during the last quarter, Worldscale levels reached
their peak (WS 120 / 130) for short voyages to
the East and WS 107,5 / 110 for longer voyages to
the U.S. Lucky owners have been able to benefit
from returns unthinkable throughout the first three
quarters, which often exceed $60,000 per day.
Another reason for the additional volatility of this
market is that, apart from the traditional traffic out
of the Middle East Gulf, an increase from other
sources notably West Africa has developed. Thus
in this zone, which up till now saw the Suezmax
playing a dominant role, there has been an increase
in combining stems for VLCC’s.
There is also an expanding share of traffic towards
the Far East, which confirms a trend towards shorter
hauls that affects the global tonnage demand.
As to owners’ situation, already alluded to in our
last report, the policy of forming “commercial
pools” chosen by some in the lean periods, has
come under pressure following the poor levels
being obtained in the period up until September.
Consequently we have seen the departure of
Sep 00
Oct 00
Dec 00
Jan 01
Suezmax tanker freight rates
Average earnings
Feb 01
Apr 01
May 01
June 01
Aug 01
Sep 01
Nov 01
Dec 01
Jan 02
130,000 t Sidi Kerir/Fos - TCE
130,000 t Forcados/Texas City - TCE
Mar 02
Frontline from the Tankers International pool. As
this is one of the leading VLCC owners in the
world, it has to be admitted that there are difficulties
and limits of such a policy in a declining
market.
Suezmax
The results of the past year are similar in all respects
for this category of tankers to those of
VLCC’s.
After 2001, which despite its ups and downs was
on the whole positive (with average returns close
to $30,000 per day), owners were unable to resist
the gradual deterioration of the overall economic
conditions. Whilst the levels and returns did not
fall to the depressed levels of 1999, there was
nonetheless a steady decline from January to September
2002.
As with the VLCCs and for the same reasons, the
last quarter saw a jump in levels as abrupt as it was
excessive, and unjustified by the fundamentals of
the market.
Even more than the previous year, it was the Mediterranean
which was the main spur of this market.
Russian exports now play a major role, together
with the constant flow of liftings from the Sumed
pipeline and in “normal” times, Iraq crude exports
out of Ceyhan.
With respect to Russian Black Sea liftings, the new
Turkish regulations introduced at the end of the
Apr 02
June 02
July 02
Aug 02
Oct 02
Nov 02
Dec 02
The Tanker Market in 2002
25

26
year (with the Dardenelles transit only permitted in
daylight hours) these add at least another two
days to voyage times. With an ever-increasing rise
in traffic, there are real jams, which can double the
theoretical transit time. This simple measure naturally
affects tonnage availability and helps push
rates higher.
As already mentioned, West Africa is in the process
of losing its position as a driving force, even
though it still represents an important share of the
global traffic, especially towards the U.S.. On this
route the average rate experienced this year was
around WS 78,5 compared to an average in 2001
close to WS 110.
During the first nine months of the year, with the
exception of a slight hike in June, returns remained
below $15,000 per day. Proof of the predominant
influence of economic events on rates, this
size of tankers has remained globally balanced in
terms of numbers for many years. Thus since
1998, 106 new units (15,9 million dwt) have been
delivered while 107 (14,7 million dwt) have been
scrapped.
2002 however differed slightly from preceding years
with 25 units delivered as compared to only 15 ships
withdrawn from the fleet. Another important phenomena
in relation to previous years was the
conversion of units destined to the offshore market
being more favourable to VLCC than to Suezmax.
Consequently only 2 old Suezmax were converted in
2002 as compared to half a dozen VLCCs.
US$/day
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
Shipping and Shipbuilding Markets 2003
0
Jan 00
Feb 00
Mar 00
May 00
June 00
July 00
Sep 00
Oct 00
Dec 00
Jan 01
Aframax tanker freight rates
Average earnings
Feb 01
Apr 01
May 01
June 01
Aframax
Freight rates for this size of tankers have not deviated
from the overall tendency with a market in
steady decline since the beginning of 2001, up
until the notorious jump during the last quarter of
2002. Nonetheless in contrast to the larger sizes,
the lowest levels registered this year did not reach
the abyss of 1999 when returns were frequently
below $10,000 per day.
This ability to absorb the impact of the economic
crisis is largely explained by the great flexibility that
this category of ships possess.
Within the European and American zones, traffic
is extremely steady, but it only requires a minor
movement in the supply / demand equation to
produce a sizeable change in rates. Thus the North
Sea and Caribbean markets were true to form
with wild rate variations, notably in the North Sea
with the traditional bunching of liftings at the end
of the month.
However generally speaking, levels remained fairly
mediocre form January to September: WS 103
for inter North Sea voyages, WS 109 for cross Med
and WS 123 for Caribs / U.S..
The last three months of the year, but especially
November and December, allowed owners to rapidly
get out of this depressed state and to obtain steadily
improving levels. In Europe returns on modern
units often surpassed $40,000 per day. The Caribbean
market was comparatively less favourable.
Aug 01
Sep 01
Nov 01
Dec 01
Jan 02
80,000 t UK/Continent - TCE
80,000 t East Med/West Med - TCE
Mar 02
Apr 02
June 02
July 02
Aug 02
Oct 02
Nov 02
Dec 02

The crisis that shook Venezuela in December produced
an abrupt reduction in demand and owners
quickly had to accept lower rates.
As we have seen earlier in our analysis of the Suezmax
size, the Mediterranean market was also
strongly affected and perturbed by the restrictive
Turkish measures in respect of the Black Sea traffic.
The difficulties encountered during the transit
of the Dardenelles and the Bosphorus have and
will increasingly affect the tonnage availability.
Short and long term prospects.
At the time of writing, the impact of the ‘Prestige’
shipwreck is naturally very much in our minds.
Politicians as well as others, both in Europe and in
the rest of the world, affected by the dramatic
consequences of such a pollution are trying to
adopt drastic and rapid measures.
Preventing old single-hulled tankers from carrying
fuel oil or even crude is purely a political decision
aimed to satisfy public opinion. Although it is common
sense, it does nothing to solve the maritime
risk. Whilst it reduces it, nothing stops the possibility
of seeing a 12 years old double-hulled tanker
having a similar accident, having passed through
several hands and being poorly or badly maintained.
For several years the Majors have already put in
place a system of strict vetting and only certain
less scrupulous charterers are satisfied with vessels
that fail this test.
%
100
90
80
70
60
50
40
30
20
10
0
End 1998
Crude oil tankers fleet age
A proper reinforcement of port controls and of
objective criteria adopted by both exporters as
well as importers, will contribute effectively and
efficiently towards the elimination of the few stray
sheep which causes a risk to the whole fleet and
destroys its public image.
In fact it is not fair to give the impression that the
seas are infested with “floating rust-buckets”, and
the incident of the ‘Prestige’ is more the exception
that proves the rule, at least as far as European
waters are concerned.
Considerable efforts have been made by owners
over recent years and the rejuvenation of the
world tanker fleet is today a reality.
As the graphs show, the VLCC and the Suezmax
categories have been considerably renewed over
the past four years, as today two-thirds of these
fleets are less than 10 years old. Compared to the
end of 1998, the ratio was closer to half.
Only the Aframax size, despite increasing by some
20 new units in the last four years, remains relatively
unchanged in its age structure, with a proportion
of nearly 50 % of vessels over 10 years
old. Nonetheless it should also be stated that most
of these older ships are to be found East of Suez.
As to the question of freight rates over the short
and medium term, once the excitement is over
and the traditional period of winter activity passed,
can one expect to see the strong recovery at
the end of the year being maintained?
VLCC Suezmax Aframax VLCC
Suezmax Aframax
End 2002
10 years and under
Over 10 years
The Tanker Market in 2002
27

28
Minerva Astra
105,830 dwt
crude oil tanker, built 2001
by Daewoo, operated
by Minerva Marine Inc.
Shipping and Shipbuilding Markets 2003
Putting aside the repercussions of the American
intervention in Iraq, one is forced to observe that
the global demand is unlikely to progress significantly
over the coming months. The prevailing
economic conditions remain morose in the majority
of industrialised countries and prospects for a
recovery are not for tomorrow.
Opec decided in mid-December to reduce its overproduction
as from January. This should drop to
23 million b/d with a price target between $22–28
per barrel.
At the same time the availability of tonnage will
continue to increase and the delivery of new vessels
in the coming years indicates that there will be
no shortage of transport capacity.
Tankers on orders (number of ships)
for delivery in Aframax Suezmax VLCC
2003 80 29 38
2004 39 21 21
2005 20 5 3
Total 139 55 62
If one looks at the number of single-hull units one
is forced to remark especially for the Aframax category,
that the capability of owners and shipyards
today to react is such, that an imbalance in supply
and demand in favour of owners will only be
short-lived.
Thus we believe that the extraordinary increase in
freight rates during the fourth quarter should carry
through into the first months of 2003. The impact
of the media with the pollution of the ‘Prestige’
will reinforce the tendency towards caution on the
part of majority of charterers. A marked preference
will be given to the most modern vessels.
However, without a rapid recovery in the world
economy and a lasting effect on the energy
consumption, the risk of collapse is still present.
Opec’s decision to reduce its production to levels
similar to those of the first quarter of 2002 is further
proof of the fragile nature of our market…■
The Second-hand oil tanker market
This past year will leave a bitter taste in the
mouths of industry players. Values of this type
of tankers have eroded by some 10 / 15 %
over the year despite an improvement being perceptible
in mid-December. There are numerous reasons
which have provoked this general depression,
both with buyers as well as sellers of the secondhand
tankers in the course of 2002, severely reducing
the volume of business transacted.
The main reasons were:
◆ A world economy in a depressed state.
◆ A reduction in crude production.
◆ Miserable daily returns during the first three
quarters.
◆ A perception and proof of insecurity linked to
terrorism.
◆ Declining newbuilding prices.
◆ A systematic misunderstanding and a frequent
misinformation on the part of the general media
on this type of transport, exacerbating the justified
indignation of victims of pollution.
◆ The inability of competent organisations such as
the IMO and Intertanko, to get their point of view
across to the general public.
Business done in the last quarter might have picked
up given that the financial costs remained
attractive and that owners at last enjoyed an
upsurge in freight rates resulting from the Venezuelan
crisis, an increase in crude production, and
the sound of drums in Iraq.
But very little effect was felt, as at the same time
the ‘Prestige’ accident and the indecisive bureaucratic
handling of the affair, only resulted in paralysing
buyers and sellers a little more.

Minds more competent than ours will be able to
make a cold analysis and comprehensive conclusion
on this incident involving an Aframax tanker
built in 1976, in respect of her maintenance, the
causes and the consequences. Nonetheless, we
can perhaps be permitted to recall some home
truths to those who seem only interested in this
subject either occasionally, or in a partisan or worst
of all in a demagogic manner:
◆ A bad ship is not an old ship, but one badly
maintained.
◆ A bad owner is not an “offshore” owner, but an
irresponsible one.
◆ A bad flag is not a flag of convenience, but a
permissive one.
◆ A bad manager is not an “exotic” manager, but
a manager indifferent towards his crew.
◆ A bad broker is not one looking to make a commission,
but one who fails in his duty to inform.
◆ A bad charterer is not one who optimises his
freight costs, but one who uses the services of
intermediaries in a bad way.
And finally, the most important of all these home
truths and too often wrongly underestimated:
◆ A bad sea is not a rough sea for weekend sailors,
but a sea of destructive force.
No doubt there are a number of bad ships amongst
the older ones, but to suppose that shipping
accidents will cease with the scrapping of all old
ships is fanciful. The strength of a chain is defined
by its weakest link and the same goes for the tanker
fleet. To pretend or suppose that all old ships
are floating rust-buckets, as is the case in France,
Spain and Portugal in the period after the shock at
the end of 2002, is wrong and intellectually dishonest.
Spain in dealing with the ‘Prestige’ repeated the
same mistake as France did with the ‘Erika’, in not
allowing the vessel access to a port of safety and
by sending her out to the open seas in gale force
conditions. This was the worst of all decisions in
our opinion. Japan, China and Taiwan had a similar
reaction, but fortunately without drastic consequences,
at the time of the ‘Front Tobago’ incident
in May off Taiwan.
For the future, it is to be hoped that calmer and
more constructive attitudes will prevail, as it is not
enough just to hope that by an accelerated “phasing
out” of old ships will be the panacea to the
problem of pollution at sea.
The solution exists already, which consists of diverse
regulations, laws, and responsibilities respected
by a large majority of owners. There will be
enough time to create further controls, once the
European states will meet their obligations and
instigate their part-share of port inspections (Port
State Control), when ports of refuge have been
designated, and when ships in distress stop being
sent out into storms in an irresponsible fashion.
Accelerating the “phasing out” is on one hand
unrealistic in view of the age structure of the fleet,
but above all, will probably condemn owners to
bankruptcy or to a reduced activity at sea as well
as on land, by not allowing them to depreciate
their assets over the necessary period foreseen at
the time of acquisition.
The second-hand VLCC market
Only 24 units of this class changed hands in 2002,
some 13 less than in 2001. Among these ships, 7
VLCCs were built in the 70’s and their buyers were
solely motivated by storage or conversion projects.
As an example, we can cite the en bloc sale of
‘Stena King’ and ‘Stena Queen’ for a reported
price in the region of $20 million each.
The age category, which finally caught the attention
of most buyers, was that of vessels built between
1986 and 1995, but all single-hulls. No less
than 12 vessels were concerned, namely half the
global total. This tendency can be explained by the
fact that buyers were mainly Japanese owners,
anxious to renew their fleet with double-hulls,
whilst buyers were primarily Greek taking advantage
of a low-priced market, in the expectation of a
resale in a rising market. These vessels, even singlehulled,
are sufficiently modern to enjoy several
turns of the cycle. To illustrate this contention, we
can quote the sale in June of the ‘Nisseki Maru’,
258,094 dwt built in 1988, for a price of $20 million
and that of the ‘Tango’ 264,340 dwt, 1995
sold at the same time for $29 million, even if their
“phasing out” date is within one year of each
other (2014 for the 1988, and 2015 for the 1995).
The modern double-hull vessels were the losers in
2002, as only 5 units changed hands. The downward
pressure exerted by the low prices being proposed
by shipyards, largely contributed to the
inability of buyers and sellers to find common
ground. Thus Irving Oil finally had to give up and
become resigned to releasing the ‘Irving Primrose’
and the ‘Irving Galloway’, 305,955 dwt, both built
in 1995, for a price of $57 million apiece, against
a 4 to 5 years time charter back.
The Tanker Market in 2002
29

30
Dwt
16 000 000
14 000 000
12 000 000
10 000 000
8 000 000
6 000 000
4 000 000
2 000 000
Shipping and Shipbuilding Markets 2003
Only scrapping saw a more sustained activity in
this size, since 36 VLCCs were disposed in this
way, whereas we accounted 32 such units in
2001. Scrap prices conversely were on a rise
during the course of the year. The number of 36
ships scrapped compensates the number of new
deliveries for the year 2002 which ended at 40.
The Suezmax second-hand market
Very few transactions were recorded in this category
in 2002, as only 18 Suezmax changed hands
and all the more that this total includes tankers
between 115,000 to 199,999 dwt. We have registered
respectively 24, 23 and again 23 sales for the
years 2001, 2000, and 1999.
As with the VLCCs, the poor daily returns severely
limited buyers’ budgets. In 2002, three tankers
built in 1975 and 1976 changed hands including
the ‘Sky’, 154,934 dwt, sold for $8.3 million for
conversion, nearly twice its nominal value.
The very rare Suezmaxes built in the 1980’s were
exchanged in good numbers this year, since 7
were sold, including 4 units from BP, the ‘British
Strength’, ‘British Skill’, ‘British Spirit’, and ‘British
Success’, 127,800 dwt, built in 1983, for the first
three and 1984 for the last, at a price between $6
to $7.25 million each, to two different buyers.
Eight modern double-hulled tankers, less than 10
years old, were sold this year. We can illustrate this
by the sale of the ‘Chevron Atlantic’, 149,748 dwt,
built in 1992, sold for about $28.5 million in June,
0
8
17
36
and of a vessel under construction named
‘Antares’ with delivery in 2002, for a reported
price of $51 million.
Scrappings of this type of ship were at the same
level as in 2000 (16 units), as in 2002 we counted
17 units, compared to no less than 28 in the intervening
year. In contrast to VLCCs, which were
scrapped mostly at the beginning of the year,
Suezmax sales were spread out over the year. At
the same time, 25 new ships in this category left
the shipyards.
1997 1998 1999 2000 2001 2002
29
The Aframax and Panamax
second-hand market
If we include ships over 60,000 dwt, but with
beams of over 32.20 metres, we recorded 31 deals
for Aframaxes up to 119,000 dwt in 2002. It is
therefore this category that has been least affected
by the depression, mainly as the daily returns
were less disastrous than in larger sizes.
The annual volume remains fairly steady as we
have registered 34 and 36 sales in 2001 and 2002.
Prices of modern tankers have seemed too expensive
in the eyes of buyers in comparison to the
alternative of newbuildings, which is why activity
has been concentrated in the oldest ships. The
lion’s share went to vessels in the 1977-1988 age
bracket with 20 sales out of 31, as asking prices
were sufficiently realistic to allow buyers to adapt
to spot rates which held up well. We can give as
representative sales, the ‘Marifru Maru’,
101,838 dwt, built in 1979, sold for $3.6 million,
VLCC deletions figures
40
Demolition
Conversion
41

the ‘Afrapearl’, 86,417 dwt, built 1981, sold for
about $4.75 million, and the ‘Maersk Visual’,
110,296 dwt, built 1988, for $18 million.
Eleven modern ships (built after 1990) were sold
this year of which 5 single-hull. Among them we
can cite the ‘CSK Valiant’, 97,151 dwt, 1990, for a
price of $17.8 million, and that of ‘Ventikos’,
69,998 dwt, built 1993 with a beam of 36 meters,
for $18.3 million.
Six more modern and double-hulled units changed
hands. We can quote the ‘Diana’, 96,125 dwt,
built in 1992, sold for $23.5 million in July, whereas
a more modern vessel built 1999 with a centreline
bulkhead the ‘Pine Venture’, 105;000 dwt,
obtained about $33.25 in February.
We have seen this past year 20 ships going to
scrap, slightly more than in 2001, two more than
in 2000, and the same number as in 1999. In compensation,
some 43 units joined the fleet in 2002.
More ships should have been demolished this past
year if one looks at the age structure of the fleet,
however spot rates were not bad enough to cause
a rush towards the scrapyards of Pakistan, India,
China or Bangladesh.
Panamax tankers (less than 32.30 meters beam)
also saw a reduced activity, as only 11 changed
hands in 2002 as compared to 22 the previous
year. Seven of them were built between 1978 and
1986. Otherwise 2 modern single-hull ships of
1991 and 1992 as well as 2 double-hulled resales
were realised.
We can indicate the following sales: the ‘Kestrel’,
56,963 dwt of 1979, for $2.5 million in October,
that of the ‘Seamusic III’, 70,914 dwt, built 1992,
for about $21 million in February, and finally one
of the rare en-bloc sales of the year, that of ‘LMZ
Mandi’ and ‘LMZ Zacvi’, 70,000 dwt, built 2002,
sold in April for $36.5 million apiece.
We have thus seen again that in this segment of
the market, the price spread between buyers and
sellers was insurmountable for the newest ships,
as well as for the largest.
No less than 13 ships were scrapped compared to
7 in 2001 and 8 in 2000. This is a good figure if
we remember that 9 units joined the fleet in 2002,
but this should be seen in the light of 46 new
orders placed in 2002 and an orderbook which
has already more than 70 ships.
The second-hand market for OBOs.
This type of vessel encountered sales similar to that
of the previous year, since 9 units were sold compared
to 11 in 2001. This category of the market
thus continues to retract in the course of time and
the specialisation of the fleet prevents a renewal.
Contrary to last year, no modern unit changed
hands since all OBOs sold for further trading were
built between 1980 and 1988. The double-hulled
configuration of these vessels has however allowed
them to obtain respectable prices in comparison to
classical tankers of similar age.
We can illustrate this with the sale of the ‘Probo
Baro’, 48,062 dwt, built 1988, for a price in the
order of $11.7 million, with a 2 year time charter
back. Also to be noted were the sales of the ‘Sapphire’,
70,681 dwt, built 1981, for $2.9 million in
July, and that of the ‘Tijuca’, 310,686 dwt, built
1987, for a price of $25.5 million.
Otherwise 13 ships between 50,000 and
132,000dwt were taken off to the scrapyards, thus
diminishing further the number of this type of vessels
in the fleet. Today we estimate the active fleet
to include about 120 Oil-Ore and Oil-Bulk-Ore
units of over 50,000 dwt. Nonetheless two new
units of 121,000 dwt will enter the fleet in 2003.
Tomorrow’s market
Improved levels that owners enjoyed at the end of
the year was a welcomed compensation for the
poor rates which prevailed over most of 2002, but
it is likely that once the Venezuelan and Iraqi crisis
come to an end, the gloom will return. Only
the Chinese economy is looking healthy, but even
if they increase their crude oil transportation
requirements, they will be unable to sustain the
market on their own. The U.S., Europe, and Japan
seem to continue to be stumbling along at least
for the first half of 2003. Thus we will probably
have to go through a further reduction in activity
until the above crisis and conditions have been
fully played out.
On the other hand, the balance between supply
and demand is more delicate than we might have
expected, as witnessed by the sudden surge in
rates at the end of 2002. If the price of new buildings
were to stop their infernal fall and the pace
of scrappings were to let off, or even accelerate following
the ‘Prestige’ incident, we should be able to
see a bigger volume of business in 2003. ■
The Tanker Market in 2002
31

32
Seacrown
40,039 dwt product tanker,
delivered 2003
by Hyundai Mipo,
operated by Thenamaris
Shipmanagement.
Shipping and Shipbuilding Markets 2003
The transport of refined oil products
With regards to the transport of refined
products in 2002, the year ended in a
state of euphoria. This unexpected surprise
however should not hide the fact that the
year as a whole was rather mediocre: although the
market was able to absorb the numerous deliveries
of new ships, the rates obtained both on spot
voyages as well as time-charters during the first
10 months of the year scarcely surpassed the levels
obtained at the end of 2001.
The weakness of the world economy affected the
demand of refined products, whilst the delivery
of new units were not matched by an equivalent
number of vessels being withdrawn from the
market.
Nonetheless, it is worth noting:
◆ that the Asian zone achieved more activity than
had been foreseen, resulting in a large increase in
naphtha imports, which was particularly favourable
to the bigger sizes: LR1 and LR2.
◆ that although the market was generally depressed,
it nevertheless remained very volatile, showing
that the delivery of 80 new product carriers
(from 30 to 80,000 dwt) was not enough to upset
the balance of supply and demand in tonnage.
For the second year running, daily returns of
product carriers suffered a steady decline.
The ‘handysize’ (handy product)
from 25,000 to 40,000 dwt
Specialising in the Mediterranean-Atlantic zone, this
category was the first to feel the pinch of the weak
American demand and the stagnation in Europe:
daily returns dropped continuously from January to
October, with the exception of the month of April,
with the low point being achieved in September.
Despite the poor state of the market overall,
modern vessels (double-hulled) were always given
priority by charterers.
While average daily returns achieved around
$ 11,500 per day, levels being asked by owners for
periods of 1 year rarely dropped below $ 13,500
per day, reflecting the confidence in modern vessels
by charterers. Very few long period charters (2
years or more) were concluded, with the exception
of refinancing operations (bareboat charters).
Owners confidence is based on the evidence of a
very volatile market, which is explained by two
principal factors:
◆ These vessels are largely used for carrying fuel oil

US$/day
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
Jan 01 Mar 01 May 01 Jul 01 Sep 01 Nov 01 Jan 02 Mar 02 May 02 Jul 02 Sep 02 Dec 02
◆ The proportion of the fleet controlled by independent
owners is small.
This sector of the market is therefore particularly
sensitive to the change in the demand of “clean”
refined products to which the tonnage supply cannot
adjust to quickly, thus being the first to benefit
from the upsurge realised at the end of the year.
The ‘medium range’ (MR product)
from 40,000 to 50,000 dwt
This category of the fleet is the most modern and
most numerous. Daily returns suffered the effects
of the backlash in the general demand. However
working primarily in the Asian zone, these vessels
were on the whole better off than the handysize.
In addition they continued to be sought after for
medium term periods.
In the Atlantic zone daily returns followed the
same fate as the handysizes, with the average
monthly rates being around $ 12,500 per day.
Despite a thin period between April to May, vessels
in the Asian zone were able to benefit from
the good behaviour of the local market and in the
absence of competition from the 35 – 37,000 dwt
were able to perform inter zone voyages. They
also were able to enjoy certain long voyages:
Middle East Gulf / Europe and above all Singapore
or South Korea – U.S. West Coast.
Given the relatively satisfactory results on daily
returns, owners of modern vessels kept to their
objectives of between $ 13,750 to $ 14,000 per
day, pushing charterers to fall back on vessels of
Product tanker freight rates
Average earnings
55,000 t MEG/Japan
35,000 t Rotterdam/New York
28,500 t Caribs/USAC
10 to 12 years of age. Notwithstanding several
long term periods (3 to 5 years) were made.
The ‘long range’ (LR product)
55,000 to 110,000 dwt
Specialising in the transport of light products
(naphtha / condensate) towards Japan and Korea,
these vessels were able to benefit from the strong
Asian demand. They also were frequently fixed for
voyages towards Europe and the U.S. West Coast.
Despite the fact that the curve on rates rose from
April to October, daily returns rarely surpassed
$ 15,000 per day for LR1s and $ 16,000 per day
for LR2s up until the take-off in November. However
the suddenness of the rise in rates, which
broke the $ 25,000 per day barrier within several
days only goes to show the underlying volatility of
the market. The ageing of the LR1 fleet and the
small number of new orders of LR2 should not
upset the tendency for 2003.
Few period fixtures were concluded with the exception
of modern Panamaxes which Enel and BP chartered
at levels of $14,850 and $15,000 for 3 years.
The sudden rise at the end of the year indicates
that the delivery of new ships has not
upset the balance in the supply and demand
of tonnage, nonetheless this balance could
quickly become out of step…
The availability of modern tonnage, which did
not really become surplus at the end of 2002,
could easily change.
The Tanker Market in 2002
33

34
Dwt
16,000,000
14,000,000
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
Shipping and Shipbuilding Markets 2003
0
30,000 - 40,000 dwt 40,001 - 50,000 dwt
Eighty new units of 30,000 to 80,000 dwt were
delivered in 2002 and up to 2005 some 300 additional
vessels should leave the shipyards.
This increase in modern tonnage, even if no new
order for delivery prior to 2005 is made, will result
in a rapid rejuvenation of the available fleet since
product tankers less than 20 years old will increase
by more than 20 % in 2005 compared to today
(over 850 ships of 30 to 80,000 dwt as compared
to 625 in December 2002).
This rejuvenation applies to all categories of the
market (see table) but is particularly significant in
the MR range of 40 to 50,000 dwt.
It is increasingly difficult for vessels over 20 years
old to find employment with oil companies, and
even first-class traders. However if these older vessels
have difficulty in operating in the fuel oil sector
within the Atlantic zone, they can fall back on
the East of Suez market and/or find activity transporting
molasses or vegetable oil.
In these circumstances, even though the recovery
of the market which is normal during winter and
has been assisted by the ‘Prestige’ sinking, it is
possible that this is only a short-lived reprieve
given that more than 130 new vessels will come
onto the market in 2003.
30,000 to 80,000 dwt product tankers fleet
Distribution by size and age class
Less than 20 years
20 years and over
On order
50,001 - 80,000 dwt
Demand for product tankers
could increase in the course
of the next few years.
The growing expansion of American imports from
Russian origin will automatically increase the
requirements for product tankers by extending the
number of long voyages and in requiring owners
to develop their ‘ice-class’ tonnage.
In addition, it is probable that given that the existing
fleet of double-hulled Aframaxes will not be
sufficient to satisfy the transport needs for fuel oil,
vessels of 45,000 dwt and new Panamaxes will
find a secondary market of increasing interest.
Finally, even if European demand remains in the
doldrums, the American economy is at last showing
signs of recovery, and this is the major factor
in moving freight rates especially as the Venezuelan
crisis might push the U.S. to find alternative
supplies from further afield.
If all these factors keep their promise, the year 2003
might prove to be much better than one might
expect given the numerous deliveries scheduled.
However any optimistic forecast should be tempered
by the recognition that the improvement in the
world economy remains fragile. An economic crisis
in the Far East, a military crisis in Iraq, an important
bankruptcy in Europe, could jeopardise the
recovery and the market would then go back into
a slump. ■

The product tankers second-hand market
can be qualified as a low profile year.
2002Hardly more than 58 ships of 25,000
to 110,000 dwt were sold for further trading
including 33 handysize, 17 medium range and 8
long range product tankers. Eighteen ships built in
the 70’s were sold, against 22 built in the 80’s and
18 in the 90’s among which 10 were less than 3
years old.
In this size range, 76 ships were delivered in 2002
representing 3.55 million dwt. In the same period of
time, 56 ships were deleted for a total of 2.05 million
dwt, but at the end of the year the orderbook
accounted for 329 product tankers for an overall
tonnage of 17.2 million dwt, of which 153 for delivery
in 2003, 134 in 2004 and around 40 in 2005.
With low freight rates being maintained over a
large part of the year, ships values took without
any surprise their way down at least until October,
before gaining again some ground by the end of
the year.
A standard 45,000 dwt product tanker built in
1998 that worth around $23 million in January, saw
its value declining to $22 million before recovering
a level in the region of $23 million in December.
Again in 2002, we observed a significant number
of purely financial deals, where sales are systematically
attached to charters back. The German market
was particularly attractive for such deals.
The ‘Prestige’ incident and the increased pressure
coming from both local and international authorities,
act in the favour of modern ships. The
demand for recent units is high on the market that
sustains their values, while older assets struggle to
find buyers and at price levels directly linked to
their limited trading capacities.
This will accelerate the phasing-out of the oldest
units in the years to come. This renewal trend will
also be accelerated by the huge number of ships
currently on order, which will heavily weigh on the
market.
The ‘Prestige’ incident, a cold Winter, the Venezuelan
strike and some signs of growth recovery in
the United-States made the year 2002 ending on
a bright note. This must however be tempered by
the possible consequences of a war in Iraq, a massive
orderbook and a weakness of some other economic
areas in the world. ■
Bolero
45,998 dwt product tanker,
built in 1996 by Halla,
operated by Laurin
Maritime.
The Tanker Market in 2002
35

36
Shipping and Shipbuilding Markets 2003
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THE
OFFSHORE
AND
SPECIALISED
SHIPS MARKETS
IN
2002
In general we’ve seen a slow down and at best
a steadiness in the offshore industry sectors.
The high oil price throughout the year did not
boost the exploration & production investments,
nor did the Iraki crisis really impact the supply and
demand balance.
Consolidations, mergers and acquisitions have
continued in all industry branches. We have witnessed
the giant Conoco – Phillips merger and in
the offshore and engineering / construction side
we saw the formation of Aker-Kværner as well as
the Keppel Fels takeover of Verolme Botlek.
Pushing into deeper and deeper waters, the technological
differences in the various areas are slowly
being erased and we see the early beginning of
a market globalisation with a few key players for
each of the offshore markets.
Offshore support vessels
The Anchor Handling Tug / Supply (AHTS) and the
Platform Supply Vessel (PSV) fleet utilisation conti-
nued to drop in the main markets throughout
most of the year. Lower drilling activities and delivery
of a number of uncommitted newbuildings,
have both contributed to the market imbalance.
A general trend is continued in so far that oilfields
are developed further from the coast, in deeper
waters and in areas outside the established offshore
field infrastructures. This creates a demand
for a further evolution of the sophisticated and
self-sustaining multipurpose modern vessels.
Groupe Bourbon worked their way into the North
Sea with a controlling stake in Havila Supply ASA
with Saevik, Ulstein and Aker as substantial allies.
Havila will as a result obtain a better foothold in
West-Coast Africa as well as in Brazil. An example
of this, is the Petrobras award to Island Offshore II,
in which Groupe Bourbon owns 51% of the
contract for the UT722L ‘Havila Crown’. The vessel,
being the first of three newbuilding vessels of
this kind, will be operated by Havila and Delba
Maritima.
The Offshore and specialised Ships Markets in 2002
37

38
Athena
Multipurpose Support
Vessel, built 2002
by Keppel shipyard
(Singapore),
owned by SURF.
Utilisation %
100
Shipping and Shipbuilding Markets 2003
90
80
70
60
50
40
30
20
10
0
Jan 99
Apr 99
July 99
Oct 99
China is further substantiating its share of the
newbuilding market of offshore support vessels
for owners such as Vroon and Sealion.
North Sea
The spot market never gained the expected summer
momentum this year, but peaked in October
with large AHTS obtaining charter rates up to
$55,000 per day. The low drilling activities, com-
Jan 00
Apr 00
Jack-ups utilisation rates
July 00
Oct 00
Jan 01
Apr 01
July 01
Oct 01
Jan 02
North Sea - NW Europe
West Africa
North America
bined with a constant drip feed of PSV / AHTS
newbuildings and a steady supply of sublet tonnage,
has seen a market paying in general below
the $20,000’s per day.
Up to now an almost static stand-by / rescue market
is about to evolve from a one-vessel-per-rig
into a multipurpose field support vessel scenario,
that offers area contingency for several fields
simultaneously. The design is a safe, fast and envi-
Apr 02
July 02
Oct 02

Utilisation %
100
90
80
70
60
50
40
30
20
10
0
Jan 99
Apr 99
July 99
Oct 99
ronmental friendly offshore unit with ROV facilities,
helideck and fast MOB’s. Simon Møkster Shipping
AS, Norway, was awarded a sound 8 years
firm Statoil contract upon which the above will be
constructed.
The North Sea shipyards’ continuous trend
towards building hulls in low-cost areas with home
outfitting continues. The barrier of hull building is
gone, consequently, repair yards in Eastern Europe
are entering the scene taking a share of the newbuilding
market.
U.S. Gulf
The charter rates in this market were on average
about 20 % lower than in 2001. The fleet utilisation
dropped and owners reported lower earnings,
some were even forced to lay up old tonnage in
order to balance the market.
U.S. Gulf field developments are also increasingly
moving into deeper water. Many old vessels are
being traded and others are idle in need of several
$100,000’s input per ship in order to comply with
classification requirements. The market is in need
of a continuous fleet renewal in order to be able to
offer modern services to demanding oil companies.
Several market contenders rise to the challenge:
◆ Hornbeck Offshore Services LLC continues
expanding with 4+ 4 options DP2 Offshore Support
Vessels being built at Leevac Industries.
◆ Otto Candies took delivery of DP2 Offshore Support
Vessels from Bender Shipyard and from the
Jan 00
Apr 00
Semi-Submersibles utilisation rates
July 00
Oct 00
Jan 01
Apr 01
July 01
Oct 01
Jan 02
North Sea - NW Europe
West Africa
North America
new and interesting Houma Fabricators, acquired
by the Dutch shipyard De Hoop.
◆ Rigdon Marine contracted 10 OSVs at Bender
Shipyard representing the largest single offshore
order in the history of USA.
◆ Tidewater placed an order for four PSVs at Bollinger
Shipyards.
Large U.S. owners are building vessels in the
U.S.A. in compliance with the Jones Act and the
surplus tonnage is attempting to trade in the offshore
markets of Brazil, Africa and Mexico.
West Coast Africa
The general West Coast Africa market proved
strong enough to absorb tonnage coming from
the North Sea / U.S. Gulf, due to the high level of
production development activities offering some
long term opportunities.
Esso Exploration Angola, a local subsidiary of
ExxonMobil, awarded a shipping services contract
to Sonasurf, the joint venture between Sonangol
and Surf. The duration of the contract was 5 years
firm, but included options for two more 5-year
periods. The contract provides for it to define and
manage all the shipping resources required for the
development and operation of production fields
on block 17.
The African West Coast subsea market has further
evolved throughout the last years, stretching from
the laying of flexible and rigid pipes from heavy
Apr 02
July 02
Oct 02
The Offshore and specialised Ships Markets in 2002
39

40
Rigdon Marine
View of one of the ten
DP II OSVs, to be delivered
2004/2005 by Bender
Shipbuilding (USA),
ordered by Rigdon Marine
(USA).
Shipping and Shipbuilding Markets 2003
crane barges, to today’s grown market with deep
sea trends. The large spread moored barges are
slowly being replaced by modern vessels in line
with any international versatile tonnage.
An answer to these as well as to international
requirements is Surf’s newbuilding ‘Athena’ a
VS4501 MPSV delivered from Keppel this year,
equipped with DP2, accommodation for 82 persons,
FI-FI 2, under-deck capacities, anti-pollution
equipment, a high reaching 100t crane, moonpool
and a helideck in order to do a larger scope
of work.
Large support vessel owners such as Farstad and
GulfMark are eyeing this evolving market and have
begun bidding for tenders in competition with the
players already present.
Brazil
The Brazilian deep offshore market has been less
subjected to the overall markets, despite a high
domestic demand for oil, and as such, enjoys an
uninterrupted and steadily progressing E&P programme.
This domestic market prevents an open
access for international offshore tonnage, in the
form of national flag requirements briefly outlined
as follows:
◆ Heavy taxes on flagging foreign vessels into Brazil
to qualify for tenders.
◆ By law, local tonnage has the first right to any
Brazilian tender and as such, the tendering business
is open to the public. If local tonnage doesn’t
comply with the requirement, foreign tonnage
can, through local co-operating partners or subsidiaries,
obtain an operating licence for renewable
two-year periods.
The motivation of building in Brazil is direct qualification
to work in Brazilian waters, long-term
contracts from Petrobras, a high demand for
sophisticated tonnage and beneficial financing.
Instant access to the market is also of importance
as owners with vessels under construction in Brazil
are allowed to market their foreign built frontrunner
during the entire construction period.
Local shipyards have been reactivated thanks to
participations taken by experienced European and
Far Eastern shipyards.
Some of the market players that have been taking
advantage of the Brazilian market: Solstad Offshore
ASA and District Offshore ASA joining forces
forming Norskan Offshore Ltda. They have 2 x
UT755L under construction at Aker Promar, where
GulfMark’s UT719-2 and UT755L are also under
construction.
It is unlikely that this market will reach a saturation
point in the nearest future.
Caspian Sea
The Caspian El Dorado in the offshore oil activities
resulted this year in BUE taking delivery of a tailormade,
shallow draft AHTS icebreaker built at
Ulstein Verft. The same owner also bought and
now operates the AHTS ‘Stirling Iona’ and ‘Stirling
Jura’ in this region.
Due to the narrow river / canal systems, modulated
offshore units are brought in by oil companies
for assembly in the Baku area and the local competence
are struggling to get in on the technical
side. We foresee more newbuilding orders for
these waters in the time to come.
Subsea Construction / Surface Systems
The demand for subsea construction was less affected
by the general industry slow down than expected.
Whilst North Sea activity was on the low side,
West Africa has been literally pulling up the market.
Effectively there are numerous surface systems
under construction or installation. We also notice a
world wide increase in number of projects being
tendered, which leads us to believe that this industry
will not suffer from a lack of demand in volume.
On the negative side, most of the industry players
have been hit by lower margins and the risk associated
to turnkey lumpsum projects, thus we saw
the creation of Subsea 7, the result of Halliburton
Subsea and DSND merging their subsea construction
vessels into one fleet.

Average reported day rates in £/day
30,000
25,000
20,000
15,000
10,000
5,000
0
Jan 98
Apr 98
July 98
Oct 98
Jan 99
Contractors are also consolidating their fleet by
trying to get rid of their older tonnage and upgrading
their existing vessels.
In small / medium size construction vessels segment,
contractors are submitted to the competition
of the new versatile tonnage ordered by
conventional supply shipowners.
A construction worth noticing is the “North Seatype
Light Well Intervention Vessel” being built at
Aker Brattvaag. The new UT 737-L design will be
delivered in July 2003. The exhaustive efforts of
streamlining the difference in regulations between
the Maritime Administration (NMD) and the State
Department of Oil (NPD) eventually resulted in the
long awaited DnV class notation “Well Intervention
Unit Class 1”. The vessel’s main features are
106 x 21 m, compact azipod main propulsion,
DP3, accommodation for 84, helideck and a 100t
heavy compensated crane. The $ 68 m vessel is
being built on speculation for Island Offshore V.
The general demand for big surface projects proved
strong enough to keep the main EPC contractors
busy throughout the year. Some of the main
interesting events and trends to notice in 2002 are
amongst others:
◆ The further consolidation of the market: Saipem
took full control of Bouygues Offshore. Renaming
it Saipem SA, they dramatically increased their
engineering capacity. Together they were awarded
the contract for the construction of the 2 million
bbls ‘Ehra FPSO’ for Exxon Nigeria.
Apr 99
July 99
North Sea supply vessel market
Oct 99
Jan 00
Apr 00
July 00
Oct 00
AHTS > 10,000 bhp
PSV > 2,000 dwt
Jan 01
Apr 01
July 01
Oct 01
◆ The withdrawal of Keller Brown & Root and ABB
Oil & Gas as prime contractors from this specific
market.
◆ The emergence of China as an FPSO hull builder.
◆ The increase of South Korea’s market share in
this sector: Hyundai firmed up the contract for the
construction of the Exxon Angola 2 million bbls
FPSO and DSME (Daewoo) secured another
contract for a TLP (tension leg platform) for Exxon
Angola Kizomba B field.
We expect the engineering and contracting companies
to remain rather busy next year.
Drilling
The general activity and fleet utilisation have overall
been low throughout the year. The markets
hardest hit are the Gulf of Mexico and the North
Sea with numerous idle units. The latter saw UK
raise corporation tax by 10 % thus further reducing
the oil companies’ expected return in this
high-cost area. Better off markets are the West
Coast Africa, Australia, Indonesia, Malaysia and
the Mediterranean.
Some of the downturn can possibly be blamed on
the recent years’ consolidation costs among the oil
companies, reducing the drilling budgets.
Concerns about the world economy, the Iraki crisis
and its implications for oil and gas prices, are
other factors causing companies to be cautious.
This trend is also reflected in the low level of newbuilding
activities; on the other hand, the sale and
Jan 02
Apr 02
July 02
Oct 02
The Offshore and specialised Ships Markets in 2002
41

42
FSO Unity
2 million bbls, blt 2002
by Hyundai for SBM,
will be operated
on TotalFinaElf's field,
Amenam (Nigeria).
FPSO Erha
To be delivered by Saipem SA
to Exxon Nigeria,
the hull will be built by HHI
into a conventionnal dock
unlike the ‘FSO Unity’
which was built ashore.
Shipping and Shipbuilding Markets 2003
purchase market has been very active with the following
relevant transactions:
◆ Ensco made a cash and stock offer and took over
Chiles Offshore’s five modern 300 feet + jack-ups.
◆ Diamond Offshore bought the $ 68.5 m semisubmersible
‘West Vanguard’ from Smedvig ASA
and the $ 65 m semi-submersible ‘Omega’ from
Transocean.
Instead of going for new constructions, contractors
should carry on refurbishing and upgrading their
existing fleet so as to maintain their access to the
market at affordable costs, in combination with a
drought of long term contracts in the drilling market.
Seismic Market
Few opportunities have arisen in this market as the
volume demand for 2D and 3D data also suffered
from the general exploration slowdown.
The ‘CGG Mistral’ conversion was completed and
the vessel was re-delivered in 2002, being the firstof-it’s-kind
having triple-screw propulsion. She was
fitted with the new CGG solid streamers system.
Unfortunately she sunk in December. CGG also
acquired a 7.51 % stake in troubled PGS, which
hints at a further consolidation in this market.
Western Geco continued this year to sell old tonnage.
Some of these were the ex-seismic vessels
‘Western Atlas’ and the previously flooded ‘Geco
Sapphire’, both being sold out of the seismic market
and therefore at prices quite lower than the
initial asking price.
Cable Laying Market
The demand remained close to zero throughout
the year, consequently Global Crossing’s attempt
to dominate the market for high speed data communications
was followed by the $ 12.4 bn bankruptcy.
Hutchison Whampoa and Singapore Technology
should manage to pick up the remains in a
deal totalling $ 750 m.
Another 8 newbuildings and 1 conversion vessel
were delivered into the market, whereas charterers
have released as many as possible. Some vessels
are returning to the offshore market, amongst
these are the ‘Ocean Commander’, ‘Toisa Conqueror’
and the ‘Maersk Forwarder’. Others were sold
for subsea purposes: Sealion bought the ‘Fresnel’
from FT Marine and Torch Offshore bought the
‘Wave Alert’ from Global Marine. The latter vessel
will be fitted with a 125 ton crane. A few other
vessels are still on-hire, but most are laid-up or idle.
The low level of activity in the repair and maintenance
sector did not compensate the collapse of
the laying activity.
◆◆◆
Prospects
Drilling activities will remain low in the first half of
2003, but could pick up towards the second half of
the year in line with the increase in oil companies’
exploration budgets. The seismic contractors should
also benefit from this rebound. We expect to see a
further materialisation of new markets in the regions
of the Caspian Sea and the Sakhalin Islands. Following
the change of regulations, we hope to see tenders
for FPSOs in the Gulf of Mexico in 2003.
The supply vessel market has evolved over the last
10 years from being an exception in the North Sea,

to become one of major importance in multiple
geographical areas. Most of these areas have
developed into deep water projects and the support
vessel designs enabling E&P support in these
environments are beginning to set an international
standard.
The market globalisation will cause an easier shifting
of supply vessel tonnage between the geographical
markets and the natural consequence
will be a further consolidation in this sector. As
such, we also expect the various segments to
move deeper into correlated cycles, a bit like most
other international shipping markets. This is of
course with the exception of the protected offshore
areas.
The combination of the above could further
impact the associated markets and hopefully last
long enough to absorb and to balance out the
numerous supply vessel newbuildings delivered
over the last two years.
Operators of subsea and pipe-laying vessels will
have to pursue their fleet downsizing as demand
in 2003 will not meet expectations.
When the supply and offshore vessels market
eventually regains balance, traditional builders
should be alerted to cope with the pressure from
the emerging builders from China, who have set
their minds to take a significant stake of the newbuilding
market. ■
Samuel de Champlain
A versatile diesel electric
maintenance suction dredger,
built 2002 by Izar (Gijon),
owned by G.I.E. Dragages
Ports.
The Offshore and specialised Ships Markets in 2002
43

44
Shipping and Shipbuilding Markets 2003
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Information Department
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You can reach this service directly
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Or through your broker.

THE
CHEMICAL
CARRIER MARKET
IN
2002
This time last year we gave a fairly positive
assessment as to the development of the
chemical carrier market.
Our analysis highlighted the return of a better
balance in the supply and demand of tonnage, a
general improvement in the financial results of the
main owners and European operators, as well as
the limited drop in freight rates in the fourth quarter
in contradiction to all other shipping sectors.
We ended by questioning the extent of the world
economic slowdown, which started in the spring of
2001 with the recession in the American economy,
hoping for a recovery before the end of 2002.
One year later, we can observe that the stated
facts remain largely unchanged with the exception
of the world economic recovery, which has not
taken place this year and which has been pushed
back to at best the second half of 2003.
The balance between the tonnage supply and
demand still applies as delivery of new carriers has
been restricted in the course of the past year. At
the same time, the orderbook for chemical carriers
remains at a low level, despite a significant pick-up
in orders in 2002, compared to 2001, which was
particularly poor in this respect.
Freight rates
European movements
During 2001 freight rates increased overall by
some 10 to 20 %, with the European and Transatlantic
trade being at the lower end, and markets
into Asia being at the upper end. In 2002 the market
gave no sign of a trend one way or the other,
and the players in the petrochemical sector went
through the year with the uncertainties surrounding
the eventual recovery in the world economy.
The Chemical Carrier Market in 2002
45

46
dwt
600,000
500,000
400,000
300,000
200,000
100,000
Shipping and Shipbuilding Markets 2003
0
delivered in 2002
The North European market remained at healthy
levels with freight rates improving by about 10 %
at the beginning of the year. Then following a
good volume of contractual nominations, freights
fluctuated around previous levels up until the third
quarter, to finally rise significantly at the end of the
year thanks to a very sustained spot market.
The Mediterranean trade is still divided in two,
based on the age of vessels and the approvals
required by the main charterers. Consequently
there is a two-tiered market, which basically
stayed steady over the whole year.
On the other zones of trade, from the Mediterranean
to North Europe and back, rates had mixed
fortunes. For North Europe the supply of carriers is
becoming progressively reduced, following a fear
by certain owners of tighter controls and multiple
inspections by authorities in the main ports.
Consequently on this traffic, charterers faced a
shortage of supply and variations in freight rates
from 10 to 20 % within two to three months, with
peaks in the spring and the end of the year, whereas
the rest of 2002 was relatively stable.
Spot Mediterranean bound movements remained
at slightly lower levels with the main volume of
business being covered under term contracts.
Renewal of contracts for 2003 were mostly made
at unchanged levels to 2002 or else very similar,
with some obtaining a modest increase of about
5%.
Chemical carriers on order as at January 1, 2003
(in deadweight)
2003
2004
3,500-6,000 dwt
6,000-10,000 dwt
10,000-20,000 dwt
Over 20,000 dwt
2005
It is necessary to adjust these rates on European
movements as owners pay today for their bunkers
at much higher prices and some are suffering from
the dollar devaluation against the euro as numerous
freight contracts are based in dollars.
Long distance movements
On the U.S. / Europe traffic, the market suddenly
took off at the beginning of March, to peak in
April. Significant movements of styrene and cumene
were fixed by producers and traders following
some technical shutdowns in Europe. As a result
rates for lots of 2,000 tons went from $ 35 to $ 45
per ton. Thereafter freights experienced a steady
drop with rates finding levels as at the end of
2001.
On westbound Atlantic trade, the market firmed
up as from the beginning of the second quarter,
then experienced a peak during the summer with
a falling off down to $ 40 per ton for 2,000 ton
lots, to finally finish the year with a 15 % increase.
The main spot movements out of Europe were with
cargoes of methanol, MTBE and sulphuric acid.
Movements from Europe to Asia were largely term
contracts, with steady volumes in the hands of the
four main chemical owners. Spot freight rates for
1,000 tons of chemical products remained at
about $60 per from the Rotterdam area to main
Asian ports, with the same for 2,000 ton lots,
which increased in the summer and improved progressively
to $ 50 to $ 60 per ton.

number
20
18
16
14
12
10
8
6
4
2
0
delivered in 2002
On a general view point, due to the large number
of term nominations and a well-sustained spot
market for special grades, the level of ships’
employment was good and freight rates were
stable throughout the year.
The fleet
Chemical carrier owners are probably today in a
better situation than a few years ago. The number
of ships available is more or less in line with
demand and only a deterioration of the world economy
is likely to disturb this balance.
In an attempt to modernise and increase their fleet
at minimum risk, some owners have started in the
course of the year 2002 to place orders backed by
time charters for a minimum of 5 to 7 years with
purchase options of the new tonnage to be built
in Japan. Stolt, Jo Tankers, TMM, Tokyo Marine
and Iino Kaiun have signed a number of contracts
with deliveries in 2003 to 2005.
This is a new approach by Western owners, which
have been in the habit of placing orders with European
shipyards. These vessels are less sophisticated
with fewer tanks and segregations, but built to
more attractive financial conditions. More owners
and operators could be interested in the future.
Since the beginning of the year 24 ships totalling
0.4 million dwt have entered into service. The
number of purely chemical carriers (with stainless
steel tanks) on order at the end of 2002 was 71 of
which 21 were below 10,000 dwt and 50 above
Chemical carriers on order as at January 1, 2003
(in number of ships)
2003
2004
3,500-6,000 dwt
6,000-10,000 dwt
10,000-20,000 dwt
Over 20,000 dwt
this size, for respectively 0.15 million and 1.25 million
dwt. This figure is considerably higher than
the total at the end of 2001, which was 44 ships
totalling 0.97 dwt, but is below the number of
ships on order before the Asian crisis of 1998 with
107 ships and a total of 1.69 million dwt of which
42 were under 10,000 dwt and 65 above as at
end 1997.
Scrapping of chemical carriers was stable in 2002
with a new parameter however, namely an additional
number of large sizes being withdrawn. Last
year there was a total of 8 ships for slightly more
than 59,000 dwt, whereas this year there were 9
ships for a total of 150,000 dwt (of which 4 ships
over 20,000 dwt).
This trend towards scrapping chemical carriers has
been considerably reinforced by charterers insisting
on double-hulls, but also to the arrival of the
various generations of big chemical carriers built in
the mid 70’s and whose characteristics no longer
correspond to today’s needs and criteria.
◆ ◆ ◆
2005
Even more than in previous years, the absence of
any firm trend in the development of the market
has meant that owners have decided to reduce
their costs to a maximum in order to preserve their
margins. Owners are seeking to optimise costs, by
reducing crews and through partnerships on certain
routes. For example Stolt and Jo Tankers have
reached an agreement for a better co-ordination
The Chemical Carrier Market in 2002
47

48
US$/t
70
Shipping and Shipbuilding Markets 2003
60
50
40
30
20
10
0
Jan 98
Mar 98
June 98
Sep 98
Nov 98
Mar 99
of operations on port calls for their vessels leaving
the Gulf of Mexico to Asia, whilst preserving their
commercial independence.
With the same objective of fleet optimisation, the
market is awaiting the decision of the European
Commission on the creation of a commercial pool
between Vopak-Essberger and Stolt Nielsen Inter
Europe Services requested by the two owners now
for more than a year.
In this uncertain climate owners are seeking to
consolidate their positions, whilst trying to obtain
May 99
Chemical tanker spot freight rates
2,000 t easy chemical
Aug 99
Nov 99
Feb 00
Apr 00
July 00
Oct 00
Jan 01
Apr 01
Rotterdam - WC Italy
Rotterdam - USG
Rotterdam - Taïwan
July 01
Sep 01
improvements in productivity. The decreasing
number of small carriers on order and the concentration
of big chemical carriers in the hands of
fewer and fewer operators, are some of the direct
consequences of the sluggish market we have had
for the last three years.
If this new situation looks like lasting longer,
attempts at mergers and buy-outs and the creation
of pools, could in the future be multiplied,
thus limiting the diversity and competitiveness of
the chemical carrier market. ■
Dec 01
Mar 02
June 02
Aug 02
Nov 02

THE
LIQUEFIED
PETROLEUM GAS
SHIPPING MARKET
IN
2002
A fragile confidence in an uncertain market
Significant events
The three successive blows which have contributed
to the slowdown in the major industrial
and financial markets over the last two
years led us to a certain scepticism at the end of
2001. In practice the international economic situation
experienced in quick succession the bursting of
the technological bubble at the end of the second
quarter 2000, then the tragedy of September 11 th
with its multiple geopolitical repercussions, and
finally the fall in the stock markets linked initially to
the Enron affair during the last quarter of 2001.
The confidence required for any growth in the economy
upon which our sector of maritime transport
largely depends had already been seriously shaken.
We then thought that we had had the worst of
the storm behind us and could hope for the start
of a recovery, but if the cyclone left over plenty of
turbulence, other financial scandals came in affecting
the book value of large American companies
during the early months of 2002, fostering a sense
of lack of confidence.
With greater or lesser impact, all segments of our
shipping markets were affected by a spiral of
uncertainty up until mid-year, and it is only as from
the third quarter that an initial shiver of activity
came up.
Within this gloomy climate, a few tendencies can
be observed over the past 12 months :
◆ A global but limited recovery in prices for oil
products and derivatives, following the collapse
seen at the end of 2001, besides a few exceptions
such as ethylene. Here are the prices fluctuations
over the last 2 years:
The Liquefied Petroleum Gas Shipping Market in 2002
49

50
Gaz Millennium
Naftomar's 22,000 cbm
fully refrigerated
LPG carrier delivered
by Hyundai in march 2002.
Shipping and Shipbuilding Markets 2003
Products Nov 2000 Nov 2001 Nov 2002 %
Crude oil, Middle East Gulf ($/bbl) 32 17 24 + 41
Brent crude, North Sea ($/bbl) 33 18 24 + 33
Naphtha cif Rotterdam ($/mt) 303 155 235 + 51
Natural gas ($/mmbtu US Henry Hub) 8.03 (Dec) 2.54 (Dec) 4.25 (Dec) + 67
Propane CP (contr. price fob Saudi Arabia) ($/mt) 345 235 327 + 39
Butane CP (contr. price fob Saudi Arabia) ($/mt) 345 232 327 + 41
Anhydrous ammonia (fob Black Sea) ($/mt) 170 85 127 + 49
Ethylene (contr. price Europe) (e/mt) 705 550 400 - 27
Propylene poly gr (contr. price Europe) (e/mt) 595 405 470 + 16
Butadiene (Europe spot) (e/mt) 610 345 520 + 50
VCM (cif Korea/Taiwan) ($/mt) 560 350 460 + 31
◆ Parallel to this recovery in product prices, the
level of freight rates in the spot and short-term
market experienced a strong downward pressure
during the first half of the year, in the different
ship size categories, with the exception of
the VLGCs which were already at an historical
low at the end of 2001 and were able to benefit
from alternative employment in the naphtha and
clean petroleum product markets. Globally
freight rates remained depressed during the first
half of the year, then began to rise during the
summer, prior firming up more significantly
during the last quarter.
◆ We will stress again that these average rates
exclude any eventual idle time between voyages
and are in no way an indication of owners’ profits
either out of the spot market or from longer term
transactions of 2 years or more.
Ships by size/category (cbm) Nov 2000 Nov 2001 Nov 2002 %
VLGC 75/85,000 cbm spot MEG/Far East ($/mt) 42 16 28 + 75
VLGC 75/85,000 cbm 3 – 6 months t/c ($/mth) 720,000 475,000 600,000 + 26
LGC 52/59,000 cbm 2 – 6 months t/c ($/mth) 775,000 650,000 575,000 - 15
Mid-size 24/35,000 cbm equiv. t/c of spot voyage ($/mth) 625,000 580,000 575,000 - 1
12/22,000 cbm equiv. t/c of spot voyage ($/mth) 475,000 375,000 405,000 + 5
6/11,000 cbm ethyl. Equiv. t/c of spot voyage ($/mth) 375,000 275,000 300,000 + 9
4/8,000 cbm semi ref. 2/3 months t/c or equiv spot ($/mth) 280,000 220,000 225,000 + 2
4/8,000 cbm pressurised 2/3 months t/c or equiv. spot ($/mth) 220,000 175,000 185,000 + 3

◆ The development of voyages concluded around
the arbitrage of LPG prices within loadings out of
Atlantic export zones (North Europe, North Africa,
and West Africa) towards the Far East and the
U.S. These are not steady movements but generally
have the effect of capturing larger capacities
of transport, by the voyage length and by an optimisation
of ships’ sizes (i.e. movements of 20 /
35,000 cbm from North Europe to the Mediterranean
Sea). Less frequently, a few arbitrage movements
were also concluded with ethylene and
propylene out of Asia towards Europe.
◆ A sharp increase of the oldest ships sold for demolition,
as we had anticipated at the end of last year.
This is a crucial balancing factor in the market,
often alluded to these last years but rarely seen in
practice since many years. Maintenance procedures
and a higher degree of reliability of gas carriers
have meant that those ships have been kept
in service much longer than most other tank ships.
The volume of ships which have been demolished
in 2002 has been impressive. At the end of December
2002 a total of 30 units had been sold for scrap
for a total capacity of 782,000 cbm of which 6
VLGC over 66,000 cbm representing a capacity of
434,670 cbm. The average age of these 30 units is
28 years old. Nonetheless we include in these sales
two small ships of 920 cbm which are being
converted and two 12,000 cbm purchased back
from the scrap yard by a Middle East trader.
US$ 1,000 pcm
1,600
1,400
1,200
1,000
800
600
400
200
LPG carrier 24,000 - 85,000 cbm
Short-term T/C or T/C equivalent to spot voyages
Numerous constricting quality standards imposed
by Majors in recent years, even if sometimes smacking
of protectionism, has helped accelerate the
trend towards demolition. The inevitable consequence
of accidents that tankers have suffered in
recent times is affecting the age limit and consequently
the period of active life span of ships. We
should even see this tendency becoming more
accentuated over the next few years, when a
strong rejuvenation of the fleet is expected, mainly
for sizes over 35,000 cbm capacity.
A strong depreciation of ships’ values mainly due
to their lower replacement costs; as the price of
newbuildings for identical or even better performing
carriers has fallen sharply in the last few
years has taken place to reach upto 25 % below
that of earlier years. These depressed valuations
also affect the possibility of capital realisation, be
it for second-hand or scrap sales.
VLGC (Very Large Gas Carriers)
70,000 to 85,000 cbm
Another gloomy year for this sector, despite the limited
contribution of the naphtha and jet fuel markets,
with however a slight improvement during the
second half and more sound result at year’s end.
Whilst spot rates on the reference voyage MEG / Far
East did not exceed $19 / 20 per ton during the first
half – for an average time charter equivalent
(depending on ship’s specifications) of about
$400,000 per month – the time charter rates for a
24-43,000 cbm
52-60,000 cbm
70-85,000 cbm
0
Jan 96 July 96 Jan 97 July 97 Jan 98 July 98 Jan 99 July 99 Jan 00 July 00 Jan 01 July 01 Jan 02 July 02
The Liquefied Petroleum Gas Shipping Market in 2002
51

52
Djanet
84,000 cbm, LPG carrier
blt at Kawasaki H.I.
and delivered to her owners
Sonatrach in october 2000.
US$ 1,000 pcm
800
700
600
500
400
300
200
100
Shipping and Shipbuilding Markets 2003
short period (3 / 6 months) were slightly higher at
$ 450,000 / 500,000 per month. Trading of LPG
remained depressed and the contribution of the
clean petroleum product market was very limited.
The second half of the year was better orientated
with an initial stimulus given by some arbitrage
movements from the North Sea, West and North
Africa to Asia, then a more sustained trend in the
last quarter when spots voyages MEG /Asia rose to
an average level of $ 28 per ton or an equivalent
time charter of $ 675,000 per month.
The next few months remain highly uncertain in
this category of carriers, until the current tonnage
surplus (9 new units due for delivery during
2003-2004) can be absorbed by the sale of several
older units for scrapping.
LPG carrier 3,000 - 22,000 cbm
Medium-term T/C (6-18 months)
10-22,000 cbm
6-8,000 cbm Ethylene
3-6,000 cbm
0
Jan 96 July 96 Jan 97 July 97 Jan 98 July 98 Jan 99 July 99 Jan 00 July 00 Jan 01 July 01 Jan 02 July 02
LGC (Large Gas Carriers)
52 000 to 60 000 cbm
The LPG sector movements did not balance for the
reduced demand in ammonia for these sizes. This
tonnage category is in a period of rejuvenation,
between old carriers which are still used in ammonia
shipments, and 7 new units, which should be
delivered between 2003 and 2005.
The most modern units, under time charter or
contract of affreightment, continue to obtain the
best returns in this sector, at a level of around
$725,000 per month, whereas the rest of the fleet,
suffering from extended idle periods, did not reach
more than an average of $ 500 / 550,000 per
month time charter equivalent on the spot market.
Ammonia movements and the optimisation of LPG
cargoes in larger parcels, represent the staple diet
for these vessels but the ammonia market continues
to get more and more regionalised with the
use of smaller sizes, whilst the LPG cargo lots fall
in between two stools – VLGCs sometimes less
flexible by their size and that of 35 / 40,000 cbm
showing better flexibility but at higher cost.
Two ships were sold for scrap in this segment size
against no deliveries in 2002, but seven 59,000
cbm are on order for delivery spread out between
2003 and 2005 on behalf of Norwegian owners
and Sonatrach.

Midsize carriers
22,000 to 43,000 cbm
As in the past, this sector resisted better to the
global pressure on rates. This obviously does not
take into account any eventual idle time which
several units of 24 / 28,000 cbm suffered in the
first three quarters and representing in the case of
Exmar an annual waiting time percentage of some
17 %.
Renewing of time charters for 6 / 12 months were
concluded at levels below 10 % compared to last
years’, whereas rates for contracts of affreightment
hardly moved.
We should also note the additional capacity of the
22,000 cbm Navigator ships among which those
which were unable to find petrochemical employment
switched quite logically towards butane,
propane and ammonia markets.
There have been 4 ships sold for scrap and delivery
of two 35,000 cbm and two 22,500 cbm during
2002.
Given the greater flexibility of these ships (ammonia
to the Caribbean and inter Asia, LPG in Europe
and the Indian Ocean), the slightly better positioning
of this category size and its age structure, it
would not be surprising to see some owners benefiting
from competitive prices still proposed by
Korean and Japanese shipyards and placing orders
for newbuildings intended to replace the units due
to be scrapped in the coming years.
m. cbm
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
1966
1970
1972
1974
World Ethylene carriers fleet at the end of 2002
15 years old
and over
(43.81%)
1977
1979
1981
1983
1985
Semi-refrigerated gas carriers
8,000 to 22,000 cbm
With the long-awaited recovery in petrochemicals
not yet occurring, these ships again suffered severely
in securing full employment throughout the
first two quarters, and did not succeed to shake
off the lethargy they faced at the start of the year.
As in the other sectors, the situation improved
slightly during the third quarter with a relative
recovery, assisted by some cross-continental movements
of ethylene and propylene and an increased
demand in the LPG market out of North Europe
and the Mediterranean.
Fleets committed to some contracts of affreightment
were less affected than ships employed in
the spot market, among which some were on the
point of being laid-up.
Average returns for spot voyages (on time charter
equivalent) were hovering between $375/425,000
for the larger segment size and about $300,000
for the smaller size, with a slight premium for ethylene
carriers when employed in ethylene traffic.
These levels however were able to firm up towards
the end of the year to reach over $ 500,000 for
15 / 22,000 cbm carriers and more than $ 375,000
for the 8 / 12,000 cbm sizes.
There was again the usual development of propylene
and ethylene movements, built up around
plants shutdowns due to programmed or accidental
maintenance, sometimes to the benefit of shipping
with the realisation of additional voyages outside
traditional routes.
1987
1989
1991
Less than
15 years old
(56.19%)
1993
1995
1998
2000
2002
On
order
(13.69%)
2004
The Liquefied Petroleum Gas Shipping Market in 2002
53

54
Kappagas
5,600 cbm,
latest semi-refrigerated
newbuilding unit
delivered to Sloman Neptun
in july 2001 to enter
the Unigas Pool fleet.
Three new ethylene carriers of 8,200 / 8,500 cbm
were delivered in the course of the year (two for
Schulte / Unigas and one for Norgas) from Chinese
shipyards, and one 8,700 cbm semi-pressurised Japanese-built
ship (fixed on long term basis to Geogas).
Eight new ethylene carriers of 8,500 / 10,200 cbm
are under construction due for delivery in 2003 for
the account of Italian, German, and Norwegian
owners, but these units should soon replace a
series of 7 ships of 6 / 8,000 cbm over 25 years old
due to be phased out in the coming years.
Gas carriers of 8,000 cbm and less
The size range up to 8,000 cbm, a limit introduced
several years ago, is no longer as clear a cut as it
was, since several pressurised newbuildings with a
capacity of 8,000 to 11,000 cbm have been ordered
out of which some already delivered from Japanese
shipyards.
US$/ton
80
Shipping and Shipbuilding Markets 2003
70
60
50
40
30
20
10
LPG freight rates (spot voyages)
VLGC and 2,500/5,000 cbm
These new pressurised carriers, although dedicated
mainly for LPG trade, have a considerable
impact on the smaller size units and consequently
we have included them in this category.
This sector, split between petrochemical and LPG
employment, has been under strong pressure throughout
the year with results often lower than the
already depressed numbers registered last year. The
average results in the spot rates or for short term
periods were between $ 140,000 and $ 240,000
time charter equivalent depending on size and type
of vessel (4,000 to 8,000 cbm pressurised, semipressurised,
refrigerated, or ethylene carriers).
At those floor levels, a number of sales and mergers
were finalised. Tarquin International decided
to lower its flag and sell its fleet, divided between
Lauritzen Kosan for four 4,400 / 6,300 cbm, and
the 7 other ships of 4,000 / 8,600 cbm to members
of the Unigas Pool. Lauritzen Kosan and
Exmar joined forces to operate their respective
fleets of pressurised ships of 3,200 / 6,500 cbm
capacity in Asia, whilst a Greek owner new to the
gas market, Tsakos, has joined forces with Lauritzen
Kosan on 4 units of 4,400 to 6,300 cbm already
belonging to the latter.
As with the other size category of ships, the market
picked up marginally during the last quarter
and 2003 should begin under better auspices than
January 2002 with fewer new units due to be delivered
in the course of the coming months.
VLGC: MEG/Japan
Small vessels 2,500-5,000 cbm
European coasting
0
Jan 96 July 96 Jan 97 July 97 Jan 98 July 98 Jan 99 July 99 Jan 00 July 00 Jan 01 July 01 Jan 02 July 02

number
20
18
16
14
12
10
8
6
4
2
0
Eleven vessels were sold for scrap (of which 2 for
conversion) against 14 newbuilding delivered
during 2002 with 9 other orders due for delivery
over the period 2003-2004.
Perceptions
Taking all categories into consideration and averaging
together the variations particular to the different
size sectors, the LPG market is very near
bottom levels of operating seen over the last two
years. Absorbing the economic shocks seen
recently is proving more difficult than predicted.
The industry is also facing increased running costs.
2003 should witness a substantial increase in insurance
cover premiums (some talk of more than
30 % !), higher bunker prices for ships working
the spot market and contracts, and higher costs
for improvement in quality, becoming more and
more restrictive but necessary in order to insure
the optimal employment required by all actors.
LPG carriers deliveries 2002 & orderbook
FH 2002 SH 2002 FH 2003 SH 2003 FH 2004 SH 2004
We have at last seen an increase in the number
of carriers sold for scrap in 2002. A
total of 30 ships for about 782,000 cbm:
◆ 6 VLGC and two ships of 52,000 cbm,
◆ 5 ships between 20,000 and 50,000 cbm,
◆ 5 ships of 12,000 cbm,
◆ 8 ships of 2,000 – 7,000 cbm,
◆ 3 ships less than 2,000 cbm.
LPG second-hand market
3-11,000 cbm
20-60,000 cbm
> 75,000 cbm
FH 2005
More bad news in an already difficult context,
without mentioning the depreciation of the dollar.
What is the solution?
Even taking into account a probable improvement in
the economic situation, which is always subject to
major geopolitical disturbances or mini crisis (war or
other attempts to control natural resources, etc.) one
of the key factor for restoring a better balance in the
market remains the level of tonnage availability.
Efforts made by shipowners at combining or joining
forces together are most welcomed, when
same are resulting in a better optimisation of ships
employment, but they do nothing to correct the
imbalance created by the surplus capacity.
In this respect the year 2002 can be considered a
turning point due to the volume of sales for scrapping,
much awaited but finally committed to in
2002, faced with an orderbook that has never
been so close to the sole replacement of the fleet.
Let us hope that this trend will continue without
major disturbances over the next few years. ■
This is not very surprising if one sees that the average
age of ships going for scrap was nearly 30
years old. But it is quite possible if low freight rates
combined with high running costs and low newbuilding
costs persist, that LPG owners will come
into line with owners of other types of ships for
which the average scrapping age is 25 years.
Nonetheless these figures remain significantly
below the number of ships delivered in 2002 or
The Liquefied Petroleum Gas Shipping Market in 2002
55

56
Philippine
French flag 3,000 cbm
built 1995 belonging
to the Geogas group and
supplying LPG to Corsica
under a long term time
charter contract with
Gaz de France, Butagaz
and Antargaz.
Shipping and Shipbuilding Markets 2003
due to join the fleet in 2003. Three VLGCs were
added in 2002 and 7 more are due in 2003. Four
units of 60,000 cbm and 2 of 35,000 cbm will be
delivered in 2003, adding to 4 of 20,000 – 35,000
cbm already delivered in 2002.
Carriers over 50,000 cbm
Six VLGC and 2 units of 52,000 cbm went to the
scrapyards. The only sale for further trading in
2002 was the ‘Co-op Sunrise’ of 77,000 cbm, built
in 1987, bought by Bergesen for service in his
pool, at a price close to $ 27 million. Outside this
sale, only the oldest units were put on the market
and they only found interest for demolition.
There still remain 28 ships over 25 years old and
20 over 20 years which should, at least for the first
category, make them candidates for scrapping
when they submit to a technical inspection.
Carriers between 20,000 – 50,000 cbm
2002 began with the sale of ‘Sombeke’, 33,000
cbm, built 1990, for about $ 31 million and ended
with the sale of ‘Zeebrugge’, 24,000 cbm, built
1984, for $ 16 million against a three year charter
back.
These prices can be considered strong in comparison
to the building costs of such carriers. But the
concentrated ownership of this type of ship
among a reduced number of players, and the
absence of alternatives other than newbuilding,
coupled with good freight rates meant that healthy
levels were maintained.
Carriers between 9,000 – 20,000 cbm
Outside sales for scrapping, no others were made
in this category.
Carriers less than 9,000 cbm
Pressurised ships of 3,000 – 3,500 cbm suffered a
further drop in value of about 10 % compared to
the previous year. We can cite the following sales:
◆ ‘Golden Crux n° 15’, 3,500 cbm built in 1991,
sold for $ 4 million
◆ ‘Isle Fortune’, 3,500 cbm built 1996, sold for
$ 5.9 million
◆ ‘Regulus Gas’, 3,500 cbm built 1998, sold for
$ 6.6 million
◆ ‘Gas Rosario’, 3,500 cbm built in 1995, sold for
$ 5.1 million
◆ ‘Cotswold’ and ‘Snowdon’, 3,200 cbm, built
1989, sold for $ 3.4 million apiece, with one year’s
employment attached
In the “semi-refrigerated” carrier category, the big
event of the year was without doubt the consolidation
of the market following the return of 11
carriers belonging to the owner Tarquin to the
control of Unigas, following a block sale for about
$ 158 million to members of the pool : Sloman
Neptun and Bernard Schulte each bought a 7,200
cbm built in 1997 and a 8,600 cbm built 1998,
whilst Othello took a 8,600 cbm and a 6,300 cbm
built 1999, as well as an ethylene carrier of 4,000
cbm built in 1988. As regards the smaller units,
two 6,300 cbm built in 1999, a 5,600 cbm built in
1994, and a 4,400 cbm built in 1992 were resold
for about $53 million to Lauritzen Kosan who,
shortly afterwards, created a joint-holding 50 / 50
with Greek owner Tsakos to manage these carriers.
For carriers over 20 years, 2002 passed with buyers
only offering prices close to scrap values. Only the
‘Ledagas’, 5,100 cbm built in 1984, managed to
hit the jackpot in getting a price near $ 5.5 million,
as her technical characteristics made her the only
candidate acceptable for her Greek buyer.
◆◆◆
The conclusion, valid for all size carriers, is that the
future does not indicate a return to the good old
times, when the technical life span of a LPG carrier
(30 years or more) corresponded to the commercial
life span. The commercial and financial conditions
in force in the oil industry will more and more
be imposed as a reference to the LPG market. ■

THE
LIQUEFIED
NATURAL GAS
SHIPPING MARKET
IN
2002
ended more or less as it ended in 2001
2002with a major U.S. energy player in difficult
financial circumstances. The previous year closed
with the demise of Enron and El Paso would appear
to be repeating the show this year, although with
nowhere near the same implications. Last year in this
report we mentioned “déjà vu” with reference to El
Paso, who have now chartered-in five new Daewoo
ships from Exmar / MOL. However, we were not to
know how far our “déjà vu” statement would
stretch, as El Paso have again fallen foul to a general
malaise within the energy companies in the U.S..
Their U.S. gas pipeline operations may survive, but it
looks increasingly as if they may fall out of LNG again.
Apart from the now familiar U.S. energy company
problems, Williams, CMS. Reliance… the LNG market
in 2002 has seen both a shortage of cargoes and
ships. Whilst most activity over recent years has
focused on the U.S. market absorbing all of the surplus
available cargoes recent Asian activity has seen
the balance shift back eastwards. The Japanese
demand increased in the last quarter due to nuclear
safety concerns causing the shutdown of 7 Tepco
nuclear plants. Korean winter demand also saw a
market request for up to a further 36 cargoes. These
two events led to all of the producers trying to
increase their output to meet this demand from
their traditional customers.
Unfortunately, this Tepco demand coincided with
some plant shutdowns at Das Island alongwith
some turbine problems on the Abu Dhabi fleet that
was restricting schedules. Cargoes previously sold
on a short term basis to European buyers were then
re-directed towards the east where higher prices
were achieved. Most recently we have even seen
cargoes sold from Algeria to Kogas: Sigtto’s LNG Log
for 2002 should prove interesting reading!
And if the LNG shipping market was not tight
enough, a U.S. submarine decided to raise its
periscope into the double-bottom of the ‘Norman
Lady’ necessitating her withdrawal from
service for repairs.
The Liquefied Natural Gas Shipping Market in 2002
57

58
Number of vessels
220
200
180
160
140
120
100
1965
1967
Shipping and Shipbuilding Markets 2003
80
60
40
20
0
1969
LNG Shipping Solutions
1971
1973
1975
The fleet
In 2002, the LNG fleet has increased to 137, and by
the end of the year there was an additional 56
ships on order!
Small capacities from 18,000 to 50,000 cbm 16 ships
Medium capacities from 51,000 to 100,000 cbm 15 ships
Large capacities above 100,000 cbm 106 ships
Vessel size has been slow to increase but 2002 did
see the market considering the use of large 200,000
cbm ships for the longer haul dedicated routes that
are planned. Depending upon how the shipyards
price these new large units there could be transportation
costs savings in the region of 10-15%.
Membrane technology continues to lead the orderbooks
with 64 % of the vessels on order featuring
Existing LNG fleet by containtment system
Worms/Gaz de France
IHI SPB Prismatic
Esso
TGZ
LNG vessel fleet development - 1965-2006
1977
1979
GT
Moss
1981
1983
1985
1987
1989
1991
1993
1995
the GTT membrane. A new type of membrane system
was added to the GTT portfolio when Gaz de
France ordered the first CS1 vessel. The CS1 offers
increased cargo capacity without increasing the
external dimensions of the ship.
In addition there are a further 56 ships on order, or
some 40 % increase, a truly remarkable statistic!
The spate of speculative orders that prevailed in
2000 does not seem to be repeated with all new
orders being placed against firm contracts. What
does seem to be changing however is the duration
of the charters. Two of the Snohvit charters that
were confirmed earlier this year have 12 and 8-year
commitments and the recent GdF tender has asked
for a possible 12-year charter period. This reduction
from the typical 20 year charter would suggest
Daewoo SME
Mitsubishi H.I.
LNG Shipping Solutions LNG Shipping Solutions
1997
1999
2001
2003
LNG vessels on order - by shipyard
Hyundai H.I.
Samsung S.B.
Kawasaki H.I.
Izar
2005
Mitsui Shipbuilding
Chantiers de l'Atlantique

Number of vessels
60
50
40
30
20
10
0
LNG Shipping Solutions
0-5 years 6-10 years 11-15 years 16-20 years 21-25 years 26-30 years
a reflection in matching the charter period to that
of the sales contract and/or careful attention by
charterers to their balance sheets.
The age of the LNG fleet is also causing concern to
some LNG members especially in the light of the
major pollution incidents involving old tankers :
notably the ‘Erika’ and the ‘Prestige’. Both of these
ships were carrying fuel oil cargoes, fuel typically
used in power generation, and synergies with the
LNG market should not be ignored. Fuel oil is a
competing fuel to the emerging gas-fired power
generators and fuel oil is one of the elements in
most LNG pricing formulae. Any change in the circumstances
surrounding the fuel oil cost will impact
on LNG pricing, but phasing out of old fuel oil carriers
may see a similar phase out of old LNG carriers,
despite the industry’s excellent safety record
Newbuildings by containtment system
Gaz Transport Membrane
Kværner Moss
LNG Shipping Solutions
Technigaz Membrane
CS1
LNG fleet age profile as at 2007
> 30 years
It should not be forgotten that all LNG carriers
today use fuel oil as bunkers to supplement the
boil-off gas in powering the vessels. So whilst the
LNG cargo is eco-friendly the bunker fuel is not.
The risk of pollution still exists on the LNG vessels,
not necessarily from marine accidents (collision
with tugs for example) but during the more routine
operation of bunkering from barges in what are
typically sensitive areas.
The oldest LNG ships is the ‘Cinderella’, built 1964,
that was initially sold for scrap but somehow escaped
some 14 years ago, and the ‘Hoegh Galleon’,
built 1974, was also sold for scrap but re-emerged
with a new life after the tanks were repaired, are two
examples of aged vessels that are lucky to still trade
LNG today. However, these two vessels trade extensively
into Spain, a country that is currently closely
looking at the age of tonnage in its territorial waters.
New developments
Gaz de France broke the traditional mould in 2002
when the first diesel-electric propulsion ship was
ordered from Chantiers de l’Atlantique. This 74,000
cbm vessel is due for delivery in end 2004. However,
not only was a new propulsion system selected, a
new type of membrane containment system will
also be used. This CS1 system, a hybrid of the two
existing membrane technologies GT96 and TGZIII,
offers significant cost savings for the builder and
optimises cargo capacity for the owner / charterer.
In light of the diesel-electric order there has been a
surge in interest expressed in what is alternative
The Liquefied Natural Gas Shipping Market in 2002
59

60
USD million
300
250
200
150
100
50
0
1972
1973
1974
1975
LNG
VLCC
1976
LNG Shipping Solutions
Shipping and Shipbuilding Markets 2003
1977
1978
1979
propulsion to the steam turbines. This is partly due
to the change in the LNG trade, where the emergence
of a spot market demands the maximum
amount of cargo is delivered to the customer (not
usually the case in the traditional annual delivery
concept) but also the recent troubles associated
with gearboxes on some recently built turbine ships.
Gas turbine manufacturers have also turned their
attention to LNG in the wake of a downturn in aircraft
orders. Once thought extremely expensive it
would now appear that market conditions have
seen a more sensible approach to pricing.
Ship prices
Whilst LNG newbuilding prices had generally been
on the increase, but nowhere near the previous
highs, the competitive market would seem to have
returned with yards, especially the Korean shipyards,
seeking new LNG orders. There are at present
two tenders for new tonnage on the market
and it will be interesting to see at what level the
bids are set.
The graph shows the trend of pricing, with a comparison
to VLCC prices, over recent years
The yards are in general seeking orders for all shipping
and those that specialise in LNG also build other
types of ships. However, those orders are also drying
up but a knee-jerk reaction in the aftermath of the
‘Prestige’ could see this change. A recently reported
price war between two Korean yards seeking to
secure an order for containerships could see this
translate into the LNG market. There are already
1980
1981
1982
Newbuilding prices - 1972-2002
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
rumours of prices falling to the level set some three
years ago when the Spanish orders were placed.
1995
Will the E.U. relaxation on yard subsidies increase
price competition? Will inventive tax incentives
continue within Europe? If the answers to these
questions are yes, then ships prices will remain low
for the foreseeable future.
The projects
New projects
The Norwegian project, Snohvit, finally received the
final go ahead but not without opposition. Between
the EU Council in Brussels and the environmentalists
in Norway the pressure was very much against the
project. However, in the end common sense prevailed
and the project was eventually given the “green
light” in June. Some of the project partners were
also instrumental in changing the future of LNG
when TotalFinaElf and GdF elected to take their
equity gas as fob cargoes using their own ships.
Angola did not make the progress anticipated, but
although no progress was made in 2002 there
should be some good news by the end of 2003.
There has been a recent development in the Angola
LNG project that may see an advance in the
start-up date. Whilst the project was restructured
earlier in the year with a new partnership agreement
following the end of the civil war (which
enabled a change in site location at least) and the
Chevron / Texaco merger, that resulted in some slip
in the original schedule, the Angolan government
is taking a stand. They have slowed the pace of
1996
1997
1998
1999
2000
2001
2002

approvals for deep-water oil projects to synchronise
with a 2007 launch of the LNG project, which
could be interpreted as no LNG, no oil ! The real
concern in Angola is the reduction of gas flaring
which at present stands at about 85 % of its gas,
and any increase in oil production would naturally
increase the flaring. Political sensitivities could also
be influential where the United-States are looking
for diversification away from the dependency on
the Middle East and thus investment in the African
continent may be a necessity of Washington rather
than the oil companies.
There is continued discussions on Iran LNG from
the South Pars field, but given continued threat of
hostilities in that region there will be continued
uncertainty on this project. Furthermore investment
in “green field sites” is always the most difficult
aspect of a project when the long-term buyers
are no longer there. The main competition for Iran
is the existing LNG operations in Qatar which
appear to have the ability to expand at very short
notice. The infrastructure at Ras Laffan will always
give Qatar a commercial lead against a new project
that will be stretched for capital investment.
The same problems exist in Yemen as for Iran,
except that the threat of terrorism is more real in
that region. LNG projects require huge investment
and financial institutions will always assess the risk
to their investment, always choosing the least risk.
Thus allocating funds to Qatar or Oman expansions,
for example, is always easier than start-up
projects in sensitive political arenas.
Egypt is finally realising the ambition of being an
important LNG player with the final agreement for
its second LNG project. GdF signed an agreement
to purchase the entire output from the first train of
the BG led consortium and now BG is actively
pushing for expansion of the second train, which is
now expected in early 2006.
There is however greater emphasis on African projects,
apart from Angola and Nigeria LNG, as the
USA seeks non-Arab sourced hydrocarbons. There
is at least one more Nigerian project at the planning
stage and another in Equatorial Guinea.
Both of these projects will be seeking the “Americas”
market.
Expansion projects
The main activity in the increase in LNG production
capacity involves expansion schemes in existing
LNG plants. We have seen Nigeria LNG, Atlantic
LNG, Qatargas and RasGas, Australia LNG and
MLNG all develop expansion schemes.
Financing is always the key to a successful project
and that typically requires firm long term contracts
from gas buyers. Unfortunately, some of the new
gas buyers are not in a position to guarantee their
off-take quantities, Dabhol and Petronet in India
being prime examples, and so new projects seeking
similar markets struggle to attract finance, unlike
those existing plants who already have significant
cash flows.
U.S. market
The US market remains the biggest potential target
for future LNG growth. Domestic supply of
gas is diminishing whilst long term demand, from
Fernando Tapias
140,500 cbm, blt 2002
by Daewoo, owned by
Naviera F. Tapias.
The Liquefied Natural Gas Shipping Market in 2002
61

62
Shipping and Shipbuilding Markets 2003
the power sector, continues to grow. With only
four existing terminals there is a finite capacity of
about 16 million tonnes with a further 12.3 million
tonnes expansion planned, and all on the
East coast.
There are several projects for new terminals in the
Baha peninsula of Mexico plus two for the Gulf of
Mexico but now there is the likelihood of a new
terminal in northern California, a concept many
thought impossible not long ago. The regional
demand is highest in California but the slim prospect
of siting a terminal there caused the rush for
the Baha peninsula. However, it now seems that
reality has beaten off unjustified fear and the move
is on to build a Californian terminal. We should
know more on this by the end of 2003.
The Bahamas is another favoured location to site a
receiving terminal, Tractebel having bought the old
Enron site in the West, with El Paso holding onto
its proposed site, in the East, for the moment. The
advantage of the Bahamas is the proximity to the
Florida market.
Despite new security measures having been introduced
to the Boston harbour where Tractebel’s
Everett terminal is located, LNG is expected to
continue to be imported into the New England
area. Whether this would continue should Irvine’s
new proposed terminal for Nova Scotia get approval
is still unknown. The continued threats of terrorist
attacks hold a cloud over the continuance of
the Everett terminal, which is close to Boston city
centre and at the end of Logan Airport runway.
Not that LNG offers any greater danger to the city
compared to LPG, oil or chemical carriers.
The long-awaited re-opening of the Cove Point terminal
should occur in the third quarter of 2003.
New owners, Dominion Energy, having acquired
the terminal from Williams, have three customers
BP, Shell and the new user Statoil who recently purchased
El Paso’s capacity at this terminal, along
with its SPA from Snohvit.
With the forecast for U.S. gas prices around the
$4.00 per mmbtu, the U.S. market should continue
to be the stimulus for many LNG projects and if the
West coast terminals come into existence then the
Asian producers should also become involved in
this market, rather than just the Middle East and
African producers.
There would also seem to be the prospect of more
new terminals on the East coast of the U.S. with
Federal Energy Regulatory Commission (FERC)
apparently relaxing the tight reins on approval of
new sites.
Other developments
We have previously referred to the fleet age profile,
old-ship disasters and the arrival of alternative
propulsion. Larger size vessels, of up to 200,000
cbm, are under consideration by ExxonMobil and
TotalFinaElf for their new proposed long-haul trades
from Qatar whilst 145,000 cbm would appear to be
the optimum size for new orders today. The
145,000 cbm size is more or less the maximum size
acceptable to all existing terminals and as flexibility
is very much the key focus on modern LNG trade
any increase in this size is not expected in the near
future, unless the new CS1 containment system
gains wider use. The main advantage of the CS1 is
the increase in cargo capacity for no change in
external dimensions of the vessel.
As for the age profile, we would seriously question
the industry’s love affair with old tonnage when
the rest of the shipping industry is looking carefully
at the age of ships. Furthermore, with increased
efficiency of the modern tonnage and the possibility
of wider use of electric propulsion coupled with
relatively low new ship prices, the case for fleet
renewal should be given wider consideration.
Summary
LNG shipping will continue to grab headlines in the
near future, hopefully for good reasons rather than
adverse incidents such as the ‘Norman Lady’ accident
with a U.S. submarine. The fleet size is growing
at a rate previously unheard of and with 137
active and 56 on order the magical figure of 200
ships should be reached by 2007. As the new chosen
preferred fuel for the future, the growth in
LNG trade should continue and with it the LNG
shipping industry.
Evolution cannot be ignored and for LNG this will be
shorter charter periods, more flexible trading routes
with less “tram-line” operations. There should be
progression towards alternative propulsion away
from the very high fuel consumption represented by
steam turbines, and this may be hastened after the
delivery of the Gaz de France 74,000 cbm in 2 years
time that will be fitted with a diesel-electric engine.
It will be worth noting the pioneer’s effect this new
technology will have on the market.
New ship prices are expected to remain about the
present level and stay there for the future with the
anticipated arrival of the Chinese yards entering
the “club” in 2006. It should not be forgotten that
it was the emergence of the new “members” in
Korea that assisted in the fall of LNG prices in the
mid’90’s. ■

LNG SHIPPING
SOLUTIONS
LNG Shipping Solutions
propose a range of specific services
on LNG transport by sea.
As a result of the combined LNG activities
of two major international brokers*,
LNG Shipping Solution advises
its clients on chartering, sales and
purchases, newbuildings,
shipmanagement, and all commercial
aspects of LNG trade.
Contacts:
LNG SHIPPING
SOLUTIONS
LNG Shipping Solution is also
able to offer its services on project
management, specific analysis by sectors
for financial institutions or any other
intermediary, wishing to have additional
information on up-to-date dynamics
within the LNG sector.
Tel.: 44 207 283 11 37 - Fax: 44 207 283 11 52 - Email: lng@lngship.net
* LNG Shipping Solutions is a joint company
Barry Rogliano Salles - Clarkson
The Liquefied Natural Gas Shipping Market in 2002 63

64
Shipping and Shipbuilding Markets 2003
The BRS Web site
www.brs-paris.com
BRS offers a web site with regular updated information
on international maritime transportation.
In addition to the numerous pages with free access,
BRS has available for clients
PAGES WITH FREE ACCESS:
data and on line services
• Group profile
adapted to their specific
• Contacts for each department
needs.
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PAGES WITH PRIVATE ACCESS:
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• Weekly analyses
• Specific studies

THE
DRY BULK
MARKET
IN
2002
The dry bulk shipping market finished the
year 2002 taking all sizes into account at
levels that had not been seen since the end
of 2000, at a time when the overall economic
conditions were far more favourable. At the beginning
of the year nothing indicated such a sprightly
resurgence, and few analysts would have stuck
their necks out to predict freight rates around
$25,000 per day for modern Capesizes. As in
other sectors of the shipping market, everyone
was betting on a recovery of the American economy,
and in its wake that of countries in the European
Union, occurring during the course of the
second half of 2002. This was by no means the
case, and the uncertainties linked to the American
intervention and their allies in Iraq, more than ever
casts a pall over the world economy and the confidence
necessary for a rebound. Japan is for its part
still stuck in its quagmire which has been going on
for several years.
Towards a brighter horizon?
The factors that have contributed to the rise in
freight rates during the year, mainly with effect
from September, are essentially:
◆ a significant increase in raw materials into China,
Japan and other South East Asian countries; whilst
total world growth has been flat the exception is
China which registers annual increases in GNP of
the order of 7,5 %.
◆ a decrease in the number of newbuildings
coming onto the market compared to previous
years, at least as concerns the Capesizes and Panamaxes.
◆ a steady increase in the cost of bunkers, which
was caused initially by the policy of reducing OPEC
production, and secondly by the fear of conflict in
the Gulf.
◆ at the end of the year, shutdown for maintenance
of some Japanese nuclear power stations, resulting
in a sizeable increase of steam coal imports.
BRS - The Dry Bulk Market in 2002
65

66
Dwt
70,000,000
60,000,000
50,000,000
40,000,000
30,000,000
20,000,000
10,000,000
BRS - Shipping and Shipbuilding Markets 2003
0
Handymax
Panamax
Capesize
Dry bulk carriers fleet over 40,000 dwt by age class - end 2002
25 years and over 20 to 24 years 15 to 19 years 10 to 14 years 5 to 9 years Under 5 years
We will attempt a rapid tour of the main events in
the dry bulk market over the course of the past 12
months. For reference, the Baltic Dry index which
began the year at 876 points ended at 1739, the
highest level since November 2000.
Based on the statistics published by IISI at the end
of January 2003, world crude steel production has
totalled slightly over 900 million tons in 2002, an
increase of 6,4 % over 2001. The lion’s share of
this rise is due to China producing 181 million
US$/ton
18
16
14
12
10
8
6
4
2
0
Jan 00
Mar 00
June 00
Source : Baltic Exchange - BRS
Sep 00
Dec 00
Dry Cargo freight rates - Capesize
Mar 01
May 01
On order
tons, compared to 150 million in 2001, or an
increase of 20,3 %. For comparison, in 1995 Chinese
steel production was 95 million tons and was
below that of Japan’s 101 million tons. In 2002,
Japanese production reached 107 million, an
increase of 4,7 % compared to 2001, an impressive
achievement if we consider the lethargy of the
Japanese economy. Production in the E.U. only
increased by 0,1 %, and to illustrate the contrasting
situations, French production increased by
5,6 %, whereas Germany was only able to come
Aug 01
Capesize Iron Ore Tubarao / Fos 145,000 t
Capesize Coal Newcastle / Rotterdam 140,000 t
Nov 01
Feb 02
May 02
July 02
Oct 02

up with a modest rise of 0,4 %. The restrictive
measures taken by the U.S. seem to be taking
effect since after months of declining production,
American steel figures for 2002 finished with an
increase of 2,5 % over 2001 with 92 million tons.
Japanese and Korean steel producers who fed the
Chinese market throughout the year, helped alleviate
the American and European markets, thus
allowing steel prices to find their levels of the first
quarter 2000 after two years of decline. With steel
production being the driving force of the Capesize
market, the higher production levels were
bound to have an influence on freight rates.
The healthy standing of the Capesize market was
partly due to the growth in Chinese imports of iron
ore. Based on provisional figures these should
exceed 110 million tons in 2002, 20 million more
than in 2001. In addition, the share of Chinese
imports coming from Brazil should represent
27,1 % of the 2002 total, compared to 17,3 % in
1998, thereby stretching the ton/miles. If this trend
continues, in a short time Chinese imports of iron
ore will surpass that of the E.U. and of Japan. Still
in the realm of raw materials, Japan was obliged to
import nearly 6 million tons of additional steam
coal over the period September 2002 to April
2003, following the shutdown of 9 nuclear power
stations out of a total of 18, run by Tokyo Electric
Co. which helped to sustain the Panamax market
in the Pacific during the fourth quarter. In the case
of cereals, Australia suffered one of its worst
droughts in history and its crop was halved, thus
redirecting imports from the South East Asian
US$/ton
30
25
20
15
10
5
0
Jan 00
Mar 00
June 00
Source : Baltic Exchange - BRS
Sep 00
Dec 00
Dry Cargo freight rates - Panamax
Mar 01
May 01
countries. Grain trade according to the International
Grain Council should remain stable for the
2002-2003 season around 207 million tons.
In the industrial sector new mergers were formed in
2002. In Japan, NKK and Kawasaki Steel united
forces in a new entity, JFE Steel, which initiates the
first merger in the steel industry in the country and
follows the example within the European scene
which underwent a profound restructuring two years
earlier. The combined production of the two companies
totals some 28 million tons. At the same time,
NSC, Sumitomo Metals and Kobe Steel have entered
negotiations in view of getting together. And still
within the steel sector, US Steel made a proposal to
take over National Steel for $750 million but as yet
unconfirmed. Also to be noted is the intended acquisition
of the aluminium division of Corus by Pechiney.
Finally, at the end of the year, the IMO against the
better judgement of certain countries, decided to
impose double-hulls on vessels over 150 meters for
all newbuildings. This ruling still has to be ratified
within the context of the SOLAS convention by
January 2004 at the latest. Certain owners having
anticipated this decision, placed orders for doublehulled
ships already during the course of the 2002.
Parallel to the increase in freight rates over the year,
one should not forget the rise in bunker prices. The
price of IFO 380 cst went from $100 per ton in
January, basis delivery Rotterdam, to over $150 per
ton in December, which corresponds for a Capesize
to an increase of 50 cents on an average freight
rate of $ 8,15 on a voyage Brasil – Rotterdam.
Aug 01
Panamax Grain US Gulf / Japan - 54,000 t
Panamax Coal Richards Bay / Le Havre - 70,000 t
Nov 01
Feb 02
May 02
July 02
Oct 02
BRS - The Dry Bulk Market in 2002
67

Lake Biwa
53,505 dwt, blt 2002
by Iwagi (Imabari group),
owned by Misuga Kaiun (Japan)
and on long term time
charter to Louis Dreyfus
Armateurs (France).
68
BRS - Shipping and Shipbuilding Markets 2003
Capesize
To appreciate the movement of freight increases in the
Atlantic we can cite a few examples. On the iron ore
route from Brazil to China, rates went from $6 ton in
January to $7,50 on average from March to August,
to finish the year at $13,50. Transatlantic cargoes took
off from $4 at the beginning of the year to fix at over
$8 twelve months later. This hike was also repeated
within the coal market out of South Africa. At the start
of 2002, cargoes were fixed to North Europe at under
$5 per ton, to achieve $8 at the end of September,
and finish the year at above $10. In the Pacific, there
was a similar phenomenon despite the fact that the
Atlantic market benefited with a premium over the
Pacific basin. Freights on the iron ore route from Australia
to China doubled between January and December.
Backhaul routes however suffered from the drop
in liftings of minerals from Australia to Europe. This
strong rise in rates was even more pronounced on the
time-charter market. Modern large ships, fixed for
fronthaul trips with delivery Rotterdam to the Far East
via Brazil were achieving $8,000 in January and ended
the year above $26,000. Modern ships of
170,000dwt chartered for 12 months witnessed their
rates reach over $18,000 at the end of the year, some
$7,000 more than they could expect in January 2002.
The Capesize fleet has remained relatively stable and
delivery of new tonnage was limited in 2002. Twenty-five
ships for 4 million dwt were delivered, against
34 in 2001, whereas 17 ships were scrapped (of
which 8 were combined carriers). In 2003 additions
to the fleet will stay limited, despite a small growth,
due to the fact that there were very few major
orders during the period 2000-2001. Thirty-two
additional ships, for 5 million dwt, should come into
service in the course of this year. However the sudden
upsurge in freight rates during the second half
of last year, linked to low construction costs, and the
availability of early slots in certain Japanese shipyards,
plus the creation of new building docks in
China has contributed to a flood of orders to be
delivered as from 2004. No less than 50 ships have
been ordered in 2002, including several big carriers
of 200,000dwt for Japanese account.
In 2001 in line with large tanker owners, some of the
principal players in the Capesize market have created
the pool Cape International which combined some
80 ships. This unit had its difficulties in getting formed,
since in October 2002 Zodiac who had the biggest
contribution to the pool decided to withdraw.
Elsewhere, the Capesize and Panamax fleet of two
other major players in the dry bulk scene Coeclerici
and Ceres Hellenic joined forces. At the end of the
year the Belgian Cobelfret strengthened its position
within the Capesize market by acquiring the 50 %
held by BHP-Billiton in its affiliate Cobam.
Panamax
The Panamax market began the year 2002 at
depressed levels. Inter-zone rates for modern ships
did not surpass $5,500-6,000 per day. The spread
between the two basins, Atlantic and Pacific, have
progressively widened. All newbuildings were delivered
into the Pacific area, and the reduction of

$/day
19,000
18,000
17,000
16,000
15,000
14,000
13,000
12,000
11,000
10,000
9,000
8,000
7,000
6,000
5,000
Jan 00 July 00 Jan 01 July 01 Jan 02 July 02 Jan 03
voyage times (ton/miles), quickly repositioning these
ships into their original area of operation, weighed
heavily on freight levels. As with the Capesizes,
levels from the Atlantic to the Pacific rose during
the first three quarters, with modern vessels obtaining
daily returns rising from about $ 7,500 in
January to nearly $13,000 end December. This
situation lasted until the beginning of the fourth
quarter when volumes of coal coming out of China
primarily for Japanese destination helped push rates
even higher. At the end of the year however the
Pacific market went along with its alter ego in the
Atlantic. Backhaul rates stayed low throughout the
year, with owners having tonnage in the zone being
prepared to make sacrifices in order to return to the
more advantageous Atlantic.
As with the Capesize fleet, the number of Panamaxes
delivered in 2002 was down compared to the previous
year. Fifty-five ships for 4,1 million dwt entered
service, as against 116 in 2001. This drop in deliveries
will be even more marked in 2003, as only 26 new
ships for less than 2 million dwt, will come out of the
Asian shipyards. For the same reasons as with the
Capes, orders burgeoned during the second half,
mainly with the Japanese yards and to a lesser extent
with the Chinese. As a result, 76 orders were placed
in 2002, with deliveries being spread out over 2004
and 2005. Scrappings remained modest, with only 29
units of which 4 combined ships removed from the
fleet. Finally a new type of Panamax should be noted,
the Kamsarmax, its name being derived from a port
in Guinea and developed by the Japanese shipyard
Tsuneishi, with a deadweight of 82,000 (length of
229 meters, width of 32,26 meters, draught of 14,35
Average time-charter rates for bulk carriers
Modern Handymax - 3/5 months t/c (del./redel. Pacific)
Modern Panamax - 12 months t/c
Modern Capesize - 12 months t/c
meters) and capacity of 97,000cbm and of which
seven units have been ordered.
Handymax/Handysize
The bulk carrier market of Handymax and Handysize
offers a more contrasted picture. On the one
hand, the Pacific market has suffered for a long
time from the high level of newbuildings being
delivered, since on average nearly 3 ships per
week have been coming onto the market in 2002.
Conversely the Atlantic market has been well supported
mainly with traffic to the Far East. Important
volumes of steel, fertilisers, and cereals leaving
the Black Sea, the Mediterranean and North
Europe helped sustain freight rates for a good part
of the year. Consequently large, modern Handymaxes
have been able to obtain rates reaching up
to $14,000 per day for voyages to the Far East.
Satisfactory levels were seen throughout the year,
with levels never falling below $10,000 per day
after April. As with the Panamax, Handymax
owners not wishing to go off into the Pacific zone
at any price, were able to get premiums on these
destinations. At the start of the year the Atlantic
market was hesitant, with the grain trade out of
South America being slow to get off the mark. For
ships between 43 – 45,000 dwt, daily returns for
inter-Atlantic business averaged at $8,500 per day,
the lowest being in January at below $7,000 per
day, and the highest in December at around
$10,000 per day. The Indian Ocean and the
Middle East Gulf zones also benefited from a
generally favourable market due to traffic into
India or China. The Pacific market remained
BRS - The Dry Bulk Market in 2002
69

Bulk carrier
loading manganese.
depressed for the first three quarters of 2002, with
levels for inter-zone voyages rarely going over
$ 6,000 per day. During the last quarter freight
rates firmed up steadily to the point of reaching
Atlantic levels right at the end of the year.
Handysize ships traditionally enjoy a less volatile
market and started the year below $6,000 per day
for short periods reached levels near $7,000
during the last quarter. The Handysize fleet is old
and should therefore diminish progressively over
the coming years, and with no new units coming
in to replace those leaving the fleet bringing about
changes mainly in the sugar and fertiliser trade.
The decrease in deliveries of Handymax and Handysizes
in 2002 compared to 2001 had less of an
affect on the large size of dry bulk carriers, but the
persistent flow of nearly 3 ships per week coming
out of the Asian yards put continuous pressure on
the Pacific market. 148 ships for 6,2 million dwt
came into service compared to 155 the previous
year. With the same causes producing the same
effects, orders were extremely high in 2002.
About 160 new contracts were signed with confirmation
this year of the attraction for Super Handymaxes,
ships over 50,000 dwt, for which an
increasing number was ordered with Japanese and
Chinese shipyards. Against these deliveries, there
was an offset of 123 old units which went to
scrap. But contrary to the Capesize and Panamax,
the volume of deliveries will continue to be felt in
2003 since nearly 130 ships should be delivered.
The new year’s prospects are similar to those at the
end of 2002. Iron ore and coal volumes are on an
upward trend. Moreover, concerning the Capesize
and above all Panamaxes, new deliveries will be
very restricted in 2003, giving a welcomed respite
for owners. Two uncertainties remain however :
during the course of the year will the hopes of a
world economic revival, repeatedly delayed, give
an additional stimulus to the dry bulk movements?
Will China, the driving force in the dry bulk market,
continue to charge ahead at full speed and for
how long? The American military intervention in
Iraq, even of short duration, will put back this
recovery and would bring about repercussions
which nobody can precisely foresee.
The future is always right!
The Capesize second-hand
market (80,000 dwt and over)
Following as always the freight market with a certain
variation both in time as well as intensity, the
second-hand Capesize market globally tracked the
drop in the last months of 2001 before picking up
at the beginning of 2002.
This increase continued until March / April. Prices
then remained stable before firming up significantly
again as from September. The year finished
on a very strong upbeat.
70 BRS - Shipping and Shipbuilding Markets 2003

We have noted some 36 sales for further trading (17
comprising ships delivered between 1990 and 2002,
and 19 Capesize built between 1981 and 1989).
Nine ships built between 1971 and 1982 were scrapped
this year, roughly 1.14 million dwt, whereas 26
ships were delivered amounting to 4.25 million dwt.
Owners lured by a modest orderbook (about 9.3%
of the existing fleet at the end of 2001), reasonable
prices for construction and historically low
dollar interest rates, were unable to resist the
temptation to order on a massive scale.
There have been about fifty firm orders placed in
the course of the year 2002, for a total capacity of
8.5 million dwt, figures which are worth comparing
with the 20 orders of 2001 representing a
total tonnage of 3.37 million dwt.
The strong rise in freight rates during the last quarter
has however benefited primarily to secondhand
ships available on a prompt basis.
Based on construction in a good shipyard, fully
classed and in good condition, the following prices
apply:
January 2002 December 2002
150 000 dwt about about
built in 1990 $ 14 / 14.25 m $ 17.25 / 17.5 m
150 000 dwt about about
built in 1995 $ 18.5 / 19 m $ 24.5 m
There are some encouraging signs at the end of
2002 and optimism is in the air, even if some of
uncertainties cloud the market, such as the collateral
effects of the war in Iraq, new regulations
being studied for the introduction of double-hulls
for bulk carriers, etc.
One should also not forget that the tonnage on
order has to be absorbed by the market. In 2003,
there will be some 5.0 million dwt added, followed
by a further 6.4 million dwt in 2004 and with the
firm orders recorded so far, over 2.0 million for 2005.
The Panamax, Handymax
& Handysize bulk carriers
second-hand market
Predicting what the future may bring can be dangerous,
whereas if a prediction proves to be correct
then whoever was bold enough to make it,
can but refer to it.
In our last year’s annual review covering these sizes we
were of the opinion that “values had bottomed out”
and that anyone interested in investing in these sizes
should be inspecting and offering as soon as possible
as we felt that in the near future prices would increase.
In the case of Panamax and Handymax size we
were in fact cautioning prospective buyers of a possible
“stampede”, which would in turn cause prices to
climb faster and without any real logic.
It seems that this is what more or less happened.
Freight rates were rather stable for the first part of
the year but the feeling that prices had reached
the bottom fuelled competition amongst prospective
buyers resulting in higher prices than the last
comparable sales. Then as soon as buyers started
to cool down the freight markets started to firmup
resulting in very good chartering returns for dry
bulk owners, which was the perfect reason for any
potential buyer to go out hunting again.
Prices across the board increased about 10 / 15 %
within a few months, whereas the overall price
increase at the end of 2002 reached a very healthy
25% and in some cases has exceeded 30% when
compared to the beginning of 2002 / end of 2001.
Once this trend was firmly established in buyer’s
minds, it caused a flurry of activity in the sale & purchase
market.
A total of about 330 ships reportedly changed
hands during 2002, this is about double the number
of ships when compared to 2001. A 100 %
increase in the number of transactions.
Looking closer at the three size segments, we
note that when compared to the previous year
there was an increase in the reported number of
sales as follows:
◆ 75 % more Panamax sales
(2002: 70 ships / 2001: 40 ships),
◆ 144 % more Handymax sales
(2002: 117 ships / 2001: 48 ships),
◆ 86 % more Handysize sales
(2002: 143 ships / 2001: 77 ships).
It would seem that the Greek shipping community
was quick to realise this trend and actively participated
in purchasing vessels thus keeping the leading
role amongst the buyers of second-hand bulk
tonnage. Greek buyers bought about 165 vessels
representing about 50 % of the reported sales in
the three size categories under consideration.
Favourite amongst the Greek buyers proved to be
the Panamax size for which they picked up about
64 % of the ships sold during the year, the Handymax
category coming second with about 58 % of
all transactions reported to Greek buyers, leaving
the Handysize in the third place but with a respectable
35 % of the sales being reported to Greeks.
Chinese buyers were always present especially in
the Handymax and Handysize segments the latter
being their favourite “hunting ground”.
BRS - The Dry Bulk Market in 2002
71

72
BRS - Shipping and Shipbuilding Markets 2003
Korean buyers where more active than in the past
few years, especially in the latter part of 2002 going
after ships in all three categories, although early
1980’s built Panamax and Handymax ships seemed
to have been what they were most keen on.
As one would expect when looking at sales for
demolition, the number of ships reported sold for
recycling during 2002 is significantly less than
those sold during the previous year.
◆ Panamax: about 0.9 million dwt was removed
this year, 13 vessels, representing a decrease of
about 60 % over 2001 figures.
◆ Handymax: about 0.86 million dwt was removed
during 2002, 20 vessels, representing a
decrease of about 24 % over 2001 figures.
◆ Handysize: about 2.12 million dwt were removed
this year, 78 vessels, representing a decrease
of about 15 % over 2001 figures.
Less ships going for recycling resulted in a sharp
increase of prices obtained per light ton displacement
from buyers of such tonnage which at the
end of 2002 for a bulk carrier stands at about US$
170-175 per ton.
Panamax
A total of 70 ships were reported sold during 2002
and among these:
◆ 1 ship was built in 1977 - she was sold for further
trading to Indian buyers,
◆ 49 ships were built in the 1980’s (70 % of the
reported sales), of which 14 were over 20 years old,
28 were 15-20 years old, 7 were 10-15 years old,
◆ 19 ships were built in the 1990’s (27 % of the
reported sales), of which 14 were less than 10
years old,
◆ 1 vessel was built in 2000 – she was sold to
Greek buyers.
At the end of 2002 a 10 years old Panamax bulk
carrier worth about US$ 11.75 / 12.0 million,
representing an increase of about 30 / 33 % over
a period of 12 months, a 5 years old Panamax bulk
carrier worth about US$ 17.0 / 17.25 million,
which represents about 28 % appreciation when
compared to the value one year earlier in December
2001.
Handymax
A total of 117 ships were reported sold during
2002 and among these:
◆ 11 ships were built in the 1970’s (about 9.5 %
of the total Handymax sales), the oldest being a
1976-built vessel sold for further trading to Turkish
buyers,
◆ 67 ships were built in the 1980’s (about 57 % of
the total Handymax sales),
– 3 ships were over 20 years old,
– 59 ships were 15-20 years old,
– 5 ships were built 1988-1989,
◆ 35 ships were built in the 90’s (about 30 % of
the total Handymax sales),
– 27 ships were 5-10 years old,
– 8 ships were 5 years old or younger,
◆ 4 ships were built in 2000 representing about
3.5 % of the total Handymax sales.
At the end of 2002 a 10 years old Handymax bulk
carrier worth about US$ 10.5 / 11.0 million, representing
an increase of about 20 / 22 % over a period
of 12 months, a 5 years old Handymax bulk
carrier worth about US$ 14.25 / 14.5 million
which represents a 16 % appreciation when compared
to one year earlier in December 2001.
Handysize
A total of 143 ships were reported sold during
2002 and among these:
◆ 28 ships were built in the 1970’s (about 19.6 %
of the total Handy sales),
◆ 86 ships were built in the 1980’s (about 60 % of
the total Handy sales),
– 26 ships were over 20 years old,
– 55 ships were 15-20 years old,
– 5 ships were built 1988-1989,
◆ 28 ships were built in the 1990’s (about 19.6 %
of the total Handy sales),
– 3 ships were over 10 years old,
– 18 ships were 5-10 years old,
– 7 ships were 5 years old or younger,
◆ 1 ship built in 2001 was sold to Cuban interests.
At the end of 2002 a 10 years old Handy bulk carrier
worth about US$ 8.0 / 8.25 million, representing
an increase of about 15 % over a period of 12
months, a 5 years old Handy bulk carrier worth
about US$ 11.25 million, which represents a 7 %
appreciation when compared to one year earlier in
December 2001.
◆ ◆ ◆
Concluding this review of the second-hand Panamax,
Handymax and Handysize bulk carrier market
and looking ahead, a lot will obviously depend on
which way the freight markets will be heading for,
but at the end of the year the feeling is that the
dry bulk market maintains it’s momentum and this
should be felt on vessels’ prices.
We would therefore expect values to remain firm
with a slight upward trend over the next few
months. ■

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73

74
ALPHALINER®
Shipping and Shipbuilding Markets 2003
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Alphaliner is a Barry Rogliano Salles trademark.

THE
CONTAINERSHIP
MARKET
IN
2002
The year 2002 can be summed up as a year of
convalescence, after the 2001 traumas, while
2003 is hopefully to see full health recovered
– at least in the absence of any unpredictable event.
Indeed, 2002 has been also a transitional year on
another front, as new, stringent rules on container
content monitoring and cargo manifests have been
elaborated by the U.S. administration to prevent
unwanted weapons entering the U.S. The year
2003 will see these rules coming into force.
Fleet as at 1 st January 2003
During the implementation phase, hiccups will surely
occur, resulting in ship delays. Carriers said that
they will have to pass the costs of these measures
onto shippers, although it is not yet clear if it will
be through rate increases or through a “U.S. cargo
manifest” surcharge.
2002 has been a mixed year, with varying fortunes
witnessed by operators. Some of them expected
to close the year with comfortable profits while
others are deep in the red.
Cellular Box non-cellular
Size range no teu progr. no teu progr.
> 5,000 teu 207 1,254,175 27.4 %
4,000 / 4,999 teu 223 973,341 19.9 %
3,000 / 3,999 teu 249 851,109 2.0 %
2,000 / 2,999 teu 484 1,197,732 7.4 %
1,500 / 1,999 teu 400 672,155 4.4 % 25 44,841 47.6 %
1,000 / 1,499 teu 489 583,419 0.0 % 108 123,741 4.2 %
500 / 999 teu 568 403,994 2.3 % 343 227,499 5.7 %
100 / 499 teu 424 132,509 -1.7 % 1,509 361,582 5.5 %
Source : BRS-Alphaliner
Total 3,044 6,068,434 10.3% 1,985 757,663 7.1 %
The Containership Market in 2002
75

76
Shipping and Shipbuilding Markets 2003
Cellular ships : Deliveries / Orders - Year 2002
Charter rates for containerships have increased by
around 75 % on average since the January 2002
lows. At least the rise lasted until November, when
the winter season and its lower volumes of cargoes
started to take effect.
Rates eased slightly during the last weeks of 2002,
but were expected to rise again in the first quarter
of 2003. Relatively strong rates can be anticipated
for the next summer season, boosted by traditional
high seasonal volumes and a well-balanced supply
/ demand ratio.
The larger the ship, the more volatile the rates. This
is well illustrated by the fluctuation in rates for
modern 3,500 teu ships, which plunged from $ 25
/ 26,000 in the Summer 2000 to $10,000 in January
2002. They have recovered month after month
in the first part of 2002 to stagnate around
$ 17,500 in the second part of the year. Meanwhile,
rates for 1,100 teu ships went down from
$ 9,500 (summer 2000) to $ 5,250 (January 2002),
and $ 7,000 / 7,500 during the last quarter 2002.
Having plunged under the $ 6,000 mark in January
2002, the rates for 1,700 teu ships -such as the
B-170s- have risen to reach $ 9,500 in October
2002 before easing just under $ 9,000 at the year
end. There is some way to go before flirting again
with the $15,000 figure of the summer 2000.
The fleet of cellular ships over 1,000 teu identified
as idle (not including those which underwent routine
general repairs) has decreased from 160,000 /
Deliveries Orders
Size range no teu $ M no teu $ M
> 6,000 evp 26 174,940 1 775 12 89,600 836
5,500 / 5,999 evp 11 62,058 633 12 68,588 634
5,000 / 5,499 evp 6 32,661 366 13 66,392 663
4,500 / 4,999 evp 8 38,247 405 8 37,840 352
4,000 / 4,499 evp 29 123,173 1,339 4 16,882 168
3,500 / 3,999 evp 1 3,739 40
3,000 / 3,499 evp 6 19,340 220 2 6,000 60
2,500 / 2,999 evp 23 60,600 715 15 38,664 540
2,000 / 2,499 evp 20 48,099 610 6 14,868 204
1,750 / 1,999 evp 2 3,600 45
1,500 / 1,749 evp 19 31,694 490 2 3,480 42
1,250 / 1,499 evp
1,000 / 1,249 evp 22 24,693 406 6 17,472 92
750 / 999 evp 11 9,762
500 / 749 evp 19 13,255
Source : BRS-Alphaliner
Total 201 642,261 3,885 82 363,386 3,636
180,000 teu during the first four months of 2002
to around 60,000 teu during the summer. Is was
expected to increase slightly after the summer season,
but it did not, thanks to the lock-out in the
USWC ports, which has prolonged artificially the
demand for 1,000 to 2,500 teu ships in order to
scoop up the boxes left in Asia by delayed mainline
ships. At the beginning of 2003, the idle fleet
stood at 65,000 teu. Interestingly, there were no
large ships identified as mothballed. The situation
is indeed very different from one year ago.
Industrial production is rising again in most south
east Asian countries while the export boom in
China seems endless. As this region of the world
generates high containerised cargo volumes, it
governs the supply/demand balance in container
transportation more than other regions.
In 2001, the world seaborne trade contracted by
1%. It is now growing again. After a period of stalling
during the winter 2001-2002, the demand in
container transportation has, surprisingly, recovered
above all expectations. The volume of containers carried
at sea is expected to grow by 7 or 8% in 2003,
in line with growth rates observed in the 1990s.
The demand in container transportation may even
surpass these figures. The cellular fleet has risen by
10.8 % per annum over the past 7 years. The way
the market has absorbed this extra capacity is remarkable.
So, with an expected cellular fleet growth of
“only” 7.5 % per annum for the years 2003 and
2004, the market will be on the owners side.

Another factor which may have a strong impact on
rates is the trend of East Asian-U.S. cargoes shifting
from the U.S. West Coast ports to the U.S. East
Coast, to the detriment of rail “landbridges”. The
Panamax ships of 4,000+ teu are much sought
after for the Far East-USEC services that have to
transit the Panama Canal.
The longer transportation distance means that
eight or nine ships are needed on such services instead
of five or six for the Far East-USWC option.
Assuming that, say, four new Far East-USEC routes
are launched, it means that a dozen supplementary
Panamax ships are needed. This can be sufficient
to create a shortage of such ships, and could
send the charter rates soaring for 4,000 teu ships.
Fleet growth versus demand
The fleet growth is expected to match the rise in
demand, at least during the years 2003 and 2004.
A tight market may well even develop if the 10 to
11 % growth in containership demand observed
since the mid-1990s is to continue.
This spectacular growth rate of the cellular fleet
will not be repeated in the two years to come. It
will hover around 7.5 % (see accompanying table).
This will lead to a fleet of 7 million teu in January
2005, up from 6 million teu in January 2003 and
3 million teu in January 1996.
In fact, to keep up with the average yearly increases
of 7 % in the seaborne container trade observed
during the past decade, the cellular fleet should
have grown from 3 million teu in 1996 to 4.8 million
teu in early 2003 (notwithstanding the increase in
average ship speed and box handling productivity).
The dwindling breakbulk services
So, the extra 1.2 million teu of on board capacity
added to reach the 6 million teu figure has been
filled with goods which were either already containerised,
but were moved on general cargo vessels
or simply not containerised half a decade ago.
Breakbulk liner services continue to fade away as
the cargoes they carry shift to the box (see inset).
This leads to think that, in the first instance,
owners and operators were right to invest so massively
in container tonnage. However, the balance
is fragile. Most operators are struggling in trying
to make profits, and economic accidents are catastrophic
for the bottom line.
As for the non-cellular fleet deployed on liner
trades, it includes multipurpose cargo vessels, roro
ships and a few conbulkers. Some of these noncellular
ships are currently deployed on liner
trades, and as far as they can be identified they
total some 1,550 units of 100 teu and over, representing
around 800,000 teu.
By comparison, in early 1996, the figure for these
ships stood at around 2,600 units for almost
1.1 million teu. Thus, the non cellular component
of the liner fleet has lost 1,050 ships for some
0.3 million teu in 6 or 7 years, which can be assumed
to have shifted to cellular ships (and this is a
maximum figure as many general cargo ships and
ro-ros do not make full use of their teu capacity).
This still leaves us with a differential of almost
1 million teu, which can be assumed as having
absorbed cargoes not yet containerised in the mid-
1990s as well as empty boxes carried in larger
quantities than ever before.
In addition, it can be said that these massive investments
spurred competition so that box rates reached
As the container continues to make inroads into the breakbulk sector, the surviving regular
conventional services see their volumes dwindle year after year, vanishing like fading stars. Each
year brings it examples. In 2002, the U.S. Gulf-Brasil service operated by Brasilian operator Global
Transporte Oceanico (GBTO) was closed. This service used to be run with up to five 17,000
dwt / 500 teu ships in the mid 1990s (mostly Astrakhan tonnage), then lost progressively its grip
on the market as competitive container services were incessantly upgraded, up to the unavoidable
weekly frequency and with unbeatable transit times. High volumes of specific cargoes (such
as CKDs - Cars Knocked Down) and the boxes still carried on these multipurpose ships were more
and more siphoned off by full container ships, while cheaper box rates helped to attract low value
“breakbulk” cargoes. And as the cargoes flee the conventional ships, less and less sailings were
offered. Eventually, these services lost their remaining appeal with regular shippers.
The Containership Market in 2002
77

78
Shipping and Shipbuilding Markets 2003
Basis: existing fleet and confirmed orders as received at 1 January 2003
Number of ships per quarter
35
6,000 teu and over 5,000/6,000 teu 4,500/5,000 teu 4,000/4,500 teu
30
25
20
15
10
5
0
1995-I
1995-II
1995-III
1995-IV
1996-I
1996-II
1996-III
1996-IV
1997-I
1997-II
such low figures that the container sector now
attracts low value cargoes or goods of a certain
value, which were until recently cheaper to carry in
conventional or bulk carrying tonnage, such as steel
products, forest products or bagged sugar.
No reversal expected
in the box rates downtrend
Should this trend continue, as there are still a lot
of goods that could be containerised, container
tonnage could be ordered massively and yet be
filled. The question is of course the cost for carriers…
It is a nonsense to carry waste paper on
ships plying at 25 knots but such low value cargoes
make a few bucks when repositioning other-
1997-III
1997-IV
1998-I
Evolution of the fleet 1992 - 2003
Containerships over 4,000 teu - Deliveries
1998-II
1998-III
1998-IV
1999-I
1999-II
wise empty boxes, which is better that nothing at
all. Conversely, a lot of not so cheap consumer
goods are carried at a cost representing a tiny fraction
of their prices as displayed on the retail shelf.
The industry is still fragmented, with the “Top 10
carriers” controlling roughly 50 % of the market.
So there is room for bitter rivalry. Intense competition
between carriers and the race for market
share have driven rates down over the years, and
there are no signs of a reversal of this trend. Instead,
the container shipping industry is under
constant pressure not only from shippers -which is
natural- but also, more artificially, from regulators,
which suspect every form of alliance or sharing
agreements to generate cartel-like behaviour.
Cellular Box non-cellular
Year no teu progr. no teu progr.
1992 1,424 2,010,644 891 285,916
1999-III
1999-IV
2000-I
1993 1,520 2,207,466 9.8 % 966 315,529 10.4 %
1994 1,621 2,384,709 8.0 % 1,031 333,697 5.8 %
1995 1,765 2,643,221 10.8 % 1,115 362,399 8.6 %
1996 1,937 2,969,032 12.3 % 1,198 385,059 6.3 %
1997 2,130 3,345,285 12.7 % 1,309 424,505 10.2 %
1998 2,359 3,847,991 15.0 % 1,413 463,420 9.2 %
1999 2,535 4,258,281 10.7 % 1,546 542,197 17.0 %
2000 2,625 4,475,628 5.1 % 1,649 598,795 10.4 %
2001 2,755 4,892,759 9.3 % 1,776 659,997 10.2 %
2002 2,915 5,532,788 13.1 % 1,879 707,250 7.2 %
2003 3,044 6,068,434 10.3 % 1,985 757,663 7.1 %
Figures are given at 1 st Januaries of each year. Source : BRS-Alphaliner
2000-II
2000-III
2000-IV
2001-I
2001-II
2001-III
2001-IV
2002-I
2002-II
2002-III
2002-IV
2003-I
2003-II
2003-III
(Source: BRS-Alphaliner)
2003-IV
2004-I
2004-II
2004-III
2004-IV

$/day (Source: BRS-Alphaliner)
30,000
25,000
20,000
15,000
10,000
5,000
0
Jan 98
Apr 98
July 98
Oct 98
Containerships time charter rates - evolution 1998-2002
3,500 teu
2,100 teu
1,700 teu
1,100 teu
Jan 99
And with 4,000+ teu ships starting to find their
way on North-South trades, the box rates are
expected to plunge further in the long term on
these trades, in corollary to the economies of scale
that these large ships allow.
Fragmentation, competition pressure and the race
to market share are powerful incentives for mergers
and acquisitions. On the other hand, the des-
Apr 99
July 99
Oct 99
Jan 00
Apr 00
The deadweight comes back in vogue
truction of value, which has followed large mergers
in the recent past (in sectors ranging from the
automotive industry to the telecom and steel
industries) appears as a strong deterrent. There
has been a lull in the consolidations since the late
1990s. A new round of mergers is inevitable. But
who can dare say when it will happen, and in
what context ?
The cargoes which have shifted to the container over the recent years are generally significantly
heavier than the cargoes traditionally stuffed in boxes. The deadweight capacity of containerships
now takes on a greater significance than ever before. With most liner statistics focusing on teu,
the deadweight capacity has been forgotten. It is now time to reinstate it. After all, the cellular
fleet nom reaches 85 million dwt, which represents roughly 10 % of the deadweight tonnage of
the world merchant fleet.
The traditional items carried by containers are light ones, both in their own nature (think of the
volume to weight ratio of a TV set) and because of the packing used (think of the super light polyester
pads which protect this same TV set in its bulky cardboard box) – not to mention boxes full
of Christmas balls which flow periodically out of China. Light boxes have now to share ship slots
with boxes fully laden in weight.
Modern cellular ships are designed in such a way that the average load of teu carried stands at
around 12 to 13 tons per teu, which leaves roughly 10 tons of cargo per teu after subtraction of
the box tares, and allowance for bunker supplies.
Most of the time, ships are today fully laden in weight well before deck cargoes are complete.
Fortunately, empty boxes have often to be repositioned on the legs where the average loaded
box weight is high. Thus, deck cargoes are topped up with these empty boxes, provided that allowance
has been planned to take their light weight into account.
July 00
Oct 00
Jan 01
Apr 01
July 01
Oct 01
Jan 02
Apr 02
July 02
Oct 02
The Containership Market in 2002
79

80
Shipping and Shipbuilding Markets 2003
The operators
The liner shipping industry is not as concentrated
as other industrial sectors. It is scattered among
some 300 operating groups operating 4,650 ships
deployed on liner trades worldwide, representing
6.3 million teu at the closure of the year 2002, of
which only 1 % were inactive, according to BRS-
Alphaliner data.
The largest of them, Maersk-SeaLand, operates a
capacity of 825,000 teu, representing 12 % of the
global active capacity in teu terms. The next in size
is MSC, with 6.8 % of the global capacity.
There have been only minor transactions in 2002.
The most significant ones have been the sale by
Andrew Weir & Co of most of its services to Hamburg-Süd
(which bought the Ellerman Line) and
CMA CGM (which bought MacAndrews and
UBC), the sale by D’Amico di Navigazione of Italia
Straight sales
◆ Hamburg-Süd bought the Ellerman Line from
Andrew Weir & Co.
◆ CMA CGM bought MacAndrews and UBC from
Andrew Weir & Co.
◆ C.P. Ships bought Italia Line from D’Amico di
Navigazione.
◆ CSX Corp. (U.S.) reached an agreement to
convey its domestic container shipping unit CSX
Lines LLC to a venture formed with the Carlyle
Group (effective 2003).
◆ A.P. Möller bought the liner division of Copenhagen-based
Torm A/S D/S.
◆ Navalmar Transportes Maritimo (Boggazzi
Group) bought 50 % of the stock of Nordana Line
A/S from Dannebrog.
◆ CSAV bought the Norsul container shipping
activities (Brasil), which were limited to its participation
in the “Good Hope Express”.
◆ Sea Star Line (U.S.) bought Navieras de Puerto
Rico (U.S.) from Holt (U.S.).
◆ Tropical Shipping (U.S.) bought certain assets of
Tecmarine Lines and TMX Logistics (U.S.).
◆ Seaboard Marine (U.S.) bought the remaining
services of Tecmarine (U.S.).
◆ Wan Hai took over the customer base of Trans
Pacific Line.
Transfers within operating groups
◆ The Preussag Group bought the remaining
Line to C.P. Ships and the sale by CSX of its container
shipping activities to US investors. Interestingly,
the ships owned by the sellers were not involved
in the Andrew Weir and D’Amico deals, and
were merely chartered in. Other transactions are
summed up in the accompanying table.
There are larger deals in the offing. P&O Nedlloyd
could become a target when it will be introduced
on stock exchanges (which was postponed). APL,
which suffers from heavy losses, is also prone to
accept an M&A deal (although APL parent company
NOL is to raise cash from the planned sale of
its tanker subsidiary AET). The privatisations of Zim
and S.C. India are still in the news, although they
have stalled for political reasons.
East-West niche carriers are also downsizing their
operations as they cannot compete with global organisations
employing large, economic ships. In 2002,
Trans Pacific Line (TPL) left the Asia-U.S. trade while
Operators : transactions and significant moves in 2002
0.4 % of Hapag-Lloyd shares, giving it the whole
control of the company.
◆ Tschudi & Eitzen (Norway) gained 100% ownership
of the Estonian Shg Co.
◆ NYK completed its stake in TSK (its intra Asian
arm), gaining 100% ownership.
◆ Evergreen International Storage and Transport
Corp. bought Uniglory (intra Asian arm of Evergreen)
through a share swap.
Cessations of activity
◆ International Shipping Line (ISL) was terminated
after Belgium - based MCL Shipping (Maritime
Chartering & Liner Shipping Company NV, which
managed the ISL service) filed for bankruptcy (ISL
operated a North Europe - West Africa breakbulk
service).
◆ Valuship ceased its activities after the failure of
its WCNA-Europe service.
Significant other moves
◆ Senator Linie (Germany, 75 % Hanjin ownership)
left all the services involving the U.S.
◆ Sinotrans left the China-Europe trade.
◆ Fu Hai Line halted its Far East-South Africa service.
◆ Coral Container Line (Cuba) closed its own
Med-Cuba service and opted for slot buying.
◆ Global Transporte Oceanico (Brasil) closed it U.S.
Gulf-Brazil multipurpose service.
◆ Libyan carrier GNMTC ran into difficulties.

Maersk-SL + Safmarine
Mediterranean Shg Co
P & O Nedlloyd
Evergreen Group
Hanjin / Senator
APL
COSCO Container Lines
CMA-CGM Group
NYK
CP Ships Group
K Line
Mitsui-OSK Lines
Zim
China Shg Group
OOCL
Hapag-Lloyd Group
Hyundai
Yang Ming Line
CSAV Group
Pacific Int'l Lines
Hamburg-Süd Group
Wan Hai Lines
UASC
Delmas Group
Grimaldi (incl. ACL)
0
in '000 teu
100 200 300 400 500 600 700
800
900
Sinotrans left its Asia-Europe trade. Senator Linie has
also left all its U.S.-related trades, which have been
in fact shifted to its parent company Hanjin.
The fleet
The cellular fleet stood at 6,068,000teu on 1 st January
2003, shared between 3,044 ships. It has doubled
during the past seven years, in teu terms, meaning
that the average annual growth has been at roughly
10.5%. In 2002, the growth reached 10.3%.
Two hundred and one cellular ships were delivered
during the year 2002, for a total capacity of
642,261 teu. At the same time, 59 cellular ships
were withdrawn for 74,001 teu, leaving a net fleet
increase of 568,260 teu.
Eighty two cellular ships were ordered for
363,000 teu, Their cumulated value is estimated at
$3.6 billion. It is a far cry from the year 2000,
when 1,038,000 teu were ordered for a total value
of $11.5 billion (some of them were however cancelled
in 2002, especially in Polish yards).
In 2003 and 2004, the annual growth should
reach a relatively modest 7.5 %, based on the current
orderbook in January 2003 and taking into
account a deletion rate of 50,000 teu per annum.
The largest ships in service remain the 19 ‘Sovereign’
class series vessels of Maersk-SeaLand, the capacity
of which stands at around 8,000 teu (although
advertised at 6,600teu by A.P. Möller). Four of them
Liner operators ‘Top 25’ - at 1 st January 2003
Operated fleets
Based on existing fleet at 1st January 2003
teu capacity available on board operated ships
- All subsidiaries are consolidated -
(Source: BRS-Alphaliner)
were delivered in 2002. A.P. Möller has six “large”
ships on order, for delivery in 2003-2004. Their size
is undisclosed and it is only when the first ship will
be delivered that their real capacity can be appreciated.
Meanwhile, Seaspan has ordered five ships
of 8,100 teu at Samsung on behalf of a long term
charter by China Shipping Container Lines (CSCL).
There are currently 28 ships of more than
7,000 teu in service, including 25 units owned by
A.P. Möller and three by Hapag-Lloyd. There are
29 more on order : six for A.P. Möller/Maersk-Sea-
Land, eight for OOCL, five for Seaspan/CSCL, five
for Rickmers Schiffahrts/Cosco, four for P&O Nedlloyd
and the remaining ship for Hapag-Lloyd. German
owners have engaged discussions with Hyundai
for a series of ships of 8,450 teu.
With the exception of the six Maersk-SeaLand newbuildings,
for which nothing is known, all the 7,000+
teu ships offer a breadth of 42,80 m, allowing the
stowage on deck of 17 rows of boxes. This is no
coincidence: most of the large terminals are fitted
with gantry cranes with a 17-row or 18-row reach.
As for the six Maersk-SeaLand newbuildings for delivery
this year and next, a breadth of 55 or 56 meters
cannot be ruled out. It corresponds to 22 rows on
deck, in line with the gantry cranes in which Maersk-
SeaLand invested so much over the past three years
for its own terminals. One can reasonably speculate
that such an investment will be matched with the
construction of adequate ships. That means the
10,000teu barrier could be broken. ■
www.alphaliner.com
The Containership Market in 2002
81

82
Shipping and Shipbuilding Markets 2003
The containership second-hand market in 2002
as a vintage was relatively modest but
2002nonetheless respectable concerning the
second-hand market activity, with some 135 containerships
sold for a combined value of $ 1.56 billion. The
relative weakness of the market can be explained for
the most part by the quasi-non-existence of the German
market (except the numerous orders of new ships),
preoccupied by placing the 150 ships already in her
portfolio with local independent investors. On the other
hand, this year can be viewed as one of consolidation
after several seasons rich in mergers and acquisitions.
The breakdown of the sales in 2002 quite accurately
reflects the proportions of the existing fleet with 13
ships over 3,000 teu (of which 5 over 4,000 teu) sold,
30 ships between 2,000 and 3,000 teu, 50 ships 1,000
and 2,000 teu and 42 ships under 1,000 teu.
There were relatively few massive “en bloc” sales this
year, with the exception of the 11 ships built in 1995-
1996 of 650 teu for Elite Shipping sold to the Danish
operator Clipper for a global price of $110 million, and
the 4 ships of 3,500 teu built in 1993-1994 of L+B sold
to MSC following a bareboat charter for about
$ 20.7 million each.
The Greek owner Technomar was extremely active this
year with 5 ships bought in 2002 to bring his total to 13
(of which 4 GX-class, 4 G-class and 4 L-class) bought
from Evergreen on a time charter back for 5 to 7 years.
The small number of ships scrapped this year is worth
noting, 59 ships with a total containership capacity of
74,001teu roughly 1% of the world capacity. This phenomenon
can largely be explained by a freight market,
which on average was rising steadily throughout the year.
A large majority of business contracted in 2002 was
combined with charter employments (longer or shorter
depending on investment sizes) to the liner operators,
which has now become a recurring feature in this sector’s
activity.
As to price variations over the year, it can be summarised
by a rising curve, which saw all sectors appreciate by
some 10 to 20% compared to 2001. Naturally this trend
is more or less pronounced according to the various type
and size of ships. As to be expected the sale prices follow
the tendency of the market, with immediate effect in the
case of a jump in daily rates (which happened this year),
whereas prices are bolstered up for a longer period in the
case of falling freight rates. Consequently although we
have seen rates drop as from November 2002 after the
prolonged strike in ports which blocked a large number
of ships on the U.S. West Coast, ship prices have nonetheless
remained fairly stable over the last two months.
Ships under 1,000 teu
As usual with this size, buyers are fairly heterogeneous.
Given their poor profit-earning capacity in terms of
pure investment, it is rarely speculators but rather pure
liner operators who buy these ships. The market price
has remained very steady. The improvement in rates has
helped reassure buyers as to the high prices being
sought by sellers. It is in these conditions that we have
seen the following:
◆ ‘Flemming Sif’, ‘Kathrin Sif’ 9,750 dwt, 972 teu,
1990 Orskov, change hands at around $ 8.7 million
each.
◆ ‘Green Breeze’, ‘Green Better’ and ‘Green Bridge’,
512 teu, 1984 Hakodate, sold to Bangladesh buyers at
around $ 2.5 million each.
◆ ‘Xin Hai Yi’, 9,734dwt, 612teu, 1985 Japan, sold for
$ 3 million in September 2002 to Chinese buyers.
Ships of 1,000 to 2,000 teu
The market took advantage of a favourable upsurge
after having slumped in the doldrums during the course
of 2001. A large number of ships on order which
can take the place of sold units have been delivered or
are on the point of being so. Sales have for the most
part benefited from time charters back, covering the
interim period up until the delivery of new ships awaited
by the sellers. We can note for example :
◆ ‘Sagittarius’ 23,051 dwt, 2001 Szczecinska,
1,730 teu, 20 knots on 50.5 t, sold by Costa Container
Lines for $ 22 million in September to Lipsi Navigation.
◆ ‘Mapocho’ 21,184dwt, 1999 Hanjin, 1,620teu, sold
to CSAV for $ 17.4 million in September.
◆ ‘Iyo’, 24,370 dwt, 1995 Shin Kurushima, 1,613 teu,
20 knots on 53 t, sold by Fair Wind Navigation to Tsakos
for $ 13.3 million in December 2002.
◆ ‘Box Wave’, ‘Gallant Wave’, 24,083 dwt, 1995 and
1996, Shin Kurushima, 1,510 teu, 19 knots on 45 t,
sold in August to clients of Teo Shipping for $ 14 million
each with a charter-party attached for 18 months
at $ 8,000 per day.
◆ ‘Kuo Lih’, 18,050 dwt, 1995 Imabari, 1,471 teu, 17
knots on 31 t, sold in May to clients of Vroon for about
$ 9.7 million, with a charter-party attached for 12
months at a level of $ 7,500 per day.
◆ ‘Lisboa’, ‘Tavira’ and ‘Miden Agan’, 21,370 dwt,
1982 Warnowwerft, 1,438 teu, 19 knots on 62 t, sold
in October by Sarlis Container Line for about $ 3 million
each.

Ships of 2,000 to 3,000 teu
One can detect a certain hesitancy on the part of buyers
in this market as the future does not have the backing
of a fair number of operators. Some fear that the units
of 2,500 teu will be replaced sooner or later by ships
carrying more than 3,000 containers. This point of view
is supported by an orderbook which carries relatively
few ships of this size. It is true that 1999, 2000, and
2001 produced a large number of units between 2,000
and 2,800 teu. Operators have consequently been prudent,
in concluding several operations mainly secured
against firm employment:
◆ ‘P&O Nedlloyd Xiamen’, ‘Oriental Bay’ and ‘Grand
Vision’, 44,006 dwt, 59,285 dwt and 44,005 dwt, built
in 1991, 1989, and 1991 at Daewoo, with a capacity of
2,797, 4,206, and 2,986 teu were sold en bloc on subjects
to clients of Zodiac for $ 61 million.
◆ ‘MOL Victory’ and ‘MOL Independence’, 40,638dwt
and 38,014 dwt, 1988 and 1986 Imabari, 2,890 and
2,571 teu, 22 knots, sold en bloc in October by Karakoram
Maritima to clients of Danaos for $ 24 million.
◆ ‘MSC Europe’, 45,647 dwt, 1986 Tsuneishi,
2,875 teu, 22.5 knots on 89.5 t, sold in June by Acasia
Shipping to clients of Danaos for $ 12 million.
◆ ‘LT Glory’, ‘LT Grand’, ‘LT Globe’, 43,310 dwt, 1984
Onomichi, 2,728 teu, 20.5 knots on 74 t, sold en bloc
in December by Everglory Line to clients of Technomar
for $ 13 million each with a charter-party attached for
5 years at a rate of $ 12,500 per day.
◆ ‘CMA CGM Claudel’, 34,622 dwt, 2002 STX,
2,602 teu, sold by Efshipping to Schulte Group for
$33.85 million, including a transfer of the charter-party
to CMA CGM until February 2007 at $ 16,600 per day.
◆ ‘Christine Schulte’, 33,871 dwt, 2001 Hyundai,
2,550 teu, sold in December by B. Schulte to German
investors for $33.5 million, including a transfer a 4-year
charter-party to CSAV at $ 16,750 per day.
◆ ‘Ambassador Bridge’, 45,643 dwt, 1986 Tsuneishi,
2,518 teu, 22.5 knots on 89.5 t, sold in May to clients
of Danaos for $ 11 million with a 18 to 24 month charter-party
at $ 12,000 per day.
Ships over 3,000 teu
Only 13 sales were achieved out of more than 600 ships
existing in this category. None or very few sellers showed
themselves. The market was extremely nervous on
the selling side, with owners reluctant to sell for fear of
not finding a replacement unit and this, even if the sale
prices were attractive. Consequently outside of the
“straight” purchase by MSC of 4 ships from L+B, already
under charter to them, the others sales were all
undertaken by operators / investors against charters
back. These operations are more and more sought after
not only by the traditional German investors, but also
by owners such as Zodiac, Technomar, Danaos, Costamare…
◆ ‘CMA CGM Normandie’, 59,600 dwt, 1991 Samsung,
4,734 teu, 24 knots on 158 t sold in September
by CMA CGM to clients of Zodiac for $ 31 million with
a 3-year charter back at $ 21,775 per day.
◆ ‘MSC Sarah’, ‘MSC Ingrid’, and ‘MSC Matilde’,
67,795 dwt, 2000 Samsung, 4,400 teu, 25 knots, sold
in March to Swiss buyers for $40 million each and fixed
for a long period with MSC.
◆ ‘Peloponesian Pride’, 53,240 dwt, 1986 Onomichi,
3,428 teu, 21 knots on 74.5 t, sold in August by Evergreen
Marine to clients of Technomar for $ 21 million
with a 7-year charter back at $ 15,500 per day.
◆ ‘MSC Martina’, ‘MSC Sophie’, ‘MSC Monica’ and
‘MSC Rossela’, 43,600 dwt, 1993, 1994, 1993 and
1994 at Samsung, 3,424 teu, 22.5 knots on 99 t, sold
in February by Hansa Asia to MSC for $ 20.7 each, subjects
lifted following a bareboat charter with purchase
option on the 4 ships.
Nearly all analysts at the end of 2001 were predicting a
vintage 2002 somewhat depressed and a declining
market. Once again as in 2000, the containership market
surprised everybody. In a stagnant world economy,
shipping lines were able to re-distribute the cards to be
able to offer a service tailor-made to the situation. The
specificity of containers allows such flexibility. It is also
this adaptability that reassures investors, who have
found a means of investment which insures regularity,
safety (very few accidents), flexibility to market changes
and - the icing on the cake - tax relief.
At the time of writing, good news has been announced
in France regarding the introduction of “tonnage tax”
system. We can only hope that this tax incentive is as
open and accessible as it has been in Germany, which
thanks to this opening, has experienced the shipping
activity that we all know. ■
CMA CGM Normandie
4,688 teu, 59,600 dwt,
blt 1991 by Samsung,
operated by CMA CGM.
The Containership Market in 2002 83

84
Shipping and Shipbuilding Markets 2003
BRS Research and
Information Department
The Research and Information Department maintains
a large data basis and information library which covers all
sectors of activities handled by BRS, and is available for
consultation or advice of clients.
This Department handles the information reports, analyses,
studies and statistics covered on the company’s internet site.
It works in co-operation with the brokers in each departments
to meet the needs of clients.
The Research and Information Department also offers its
know-how and the companies’ international network and
expertise available to the shipping world to assist and answer
any queries.
You can reach this service directly
at the following address:
research@brs-paris.com
Or through your broker.

THE
RO-RO
MARKET
IN
2002
Is the ro-ro concept only dedicated to extremes?
The niches where the general ro-ro concept is
likely to remain and be developed are definitely
short-sea trade routes with an increasing
need for fast tonnage and deep-sea trade with rolling
cargoes only. There seems to be very little future
for intermediate distance routes where ro-ro ships
actually load combinations of rolling and containerised
cargoes, because of poor financial returns. The
interaction between the container and the “roll-on
/ roll-off” concepts on main routes often resulted in
ro-ro tonnage being unable to compete against the
operationally cheaper containerships. This trend is
unlikely to reverse. Wilhelmsen’s decision to convert
their four super carrier designed initially to carry
around 2,500 teu into vessels loading only rolling
cargo is a strong example of the limits between flexibility
and economy. To make economic sense on
long haul routes, vessels have to be specialised, large
and fast like the new generation of PCTC. South
America and West Africa are the only significant
areas served by medium-size units plying intermediate
distance routes and loading mixed cargoes.
We feel that there is a clear need of rationalisation
there, and few of the existing operators have really
yet taken concrete steps towards such a change.
The economical crisis in South America in 2002 has
substantially reduced import volumes, and as a
consequence could possibly, in the medium term,
further accelerate this rationalisation process on
lines serving the southern hemisphere from North
Europe and the Mediterranean.
The ro-ro fleet remains quite old and this appears
clearly in the graph page 86. In terms of number of
units, tonnage of 25 years old and over represents
17 % of the total ro-ro fleet. The latter focuses on
tonnage of less than 15,000 dwt which, for statistical
purposes, we have arbitrarily taken as a benchmark
limit of tonnage deployed on short-sea trade.
The Ro-Ro Market in 2002
85

86
dwt
500,000
450,000
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
1970
1971
Shipping and Shipbuilding Markets 2003
0
1972
1973
1974
1975
Ro-ro freighters with a 100% ro-ro capacity, by year of build
1976
Most of the ships that are today 25 years old or more,
will be scrapped in the short / medium term and
scrapping activity for large units in particular has
increased in 2002. Based on the existing figures and
a reasonable scrapping ratio, we expect the average
age of the fleet to be circa 18 years by 2005, and
circa 15 years old by 2010. Over the past few years,
there has been an interesting matching process between
tonnage ordered, tonnage scrapped, and tonnage
delivered. Considering the prospects of an unavoidable
rise in scrapping activity, and the limited
number of ships ordered since 2001 the market could
in theory be characterized by a shortage of tonnage
by 2005. But, bearing in mind that the ro-ro market
is a very small segment, our view is however that
there will be no sudden change in the balance of
available tonnage, but rather a tendency for operators
to continue ordering ships fitting their needs, further
reducing the volume of the time charter activity.
The graph page 87 of forecast for renewal of the
fleet has been made observing that:
◆ Average capacity of 25 year old tonnage is about
1,200 lane metres,
◆ Average capacity of recently delivered ships is
about 2,500 lane metres,
And on assumptions that :
◆ Ro-ro units deployed in deep-sea trade are likely
to be replaced by PCTC and containerships. Benchmark
size for deep-sea traders was set here at
15,000 dwt and above, whereby this projection
focuses on tonnage of less than 15,000 dwt.
1977
1978
1979
1980
1981
1982
(excl. PCC, PCTC & Ro-Lo)
1,500-3,500 dwt 3,500-5,000 dwt 5,000-7,500 dwt 7,500-10,000 dwt 10,000-15,000 dwt
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
◆ Cargoes carried today by independent shipowners
on the oldest units will be split between containerships
and tonnage deployed by well established
short-sea trade operators, once the oldest units are
scrapped.
◆ Increased speed of new vessels will result in larger
volumes shipped on given routes.
Based on the above and in order to build such a
prediction we have applied a renewal ratio of 3 to
1 between vessels to be scrapped and those to be
delivered for replacement.
When analysing the type of tonnage ordered by
tramp owners and operators in the last 7 years, the
clear tendency has been to order larger units (2,400 /
3,000 lane metres), whilst medium-size ships dedicated
to the tramp market (1,500 / 2,000 lane metres)
seem to have been somehow “forgotten”. We feel
that the next developments to come will call for tonnage
in the 1,500 / 2,000 lane metres segment, built
with rather high specs and flexibility in terms of cargo
configuration (hoistable cardecks, good manoeuvrability)
and speed of 20 knots and over.
Once again, the charter market activity has been predominant
in North Continent and Mediterranean
Sea areas. An important proportion of the chartered
tonnage replaced by own tonnage lead the main
operators to much less activity on the chartering side,
whilst a good proportion of available ships was fixed
for military movements, as observed already over the
past few years. Governmental organisations are now
more acquainted with the use and benefits of ro-ro
1995
1996
1997
1998
1999
2000
2001
2002

No ships
60
50
40
30
20
10
0
Ro-ro Fleet under 15,000 Dwt - Deliveries vs Demolitions & Forecast to 2010
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
tonnage. Most of these old units released from their
time charter commitments were actually sold to
either end-users or mainly Greek tramp owners.
Whilst trade in the Baltic Sea sustained good chartering
activity at the beginning of the year, the Spanish
and Italian markets could prove to become new
grounds for further developments, with local operators
investing in second-hand tonnage. No tramp shipowner
dared however to bet massively on buying
second-hand tonnage to play the market on a speculative
basis, and this is certainly a wise decision.
As a consequence of orders placed during the past
few years, the average age of tonnage owned by
the main operators has been lowered substantially
and the ratio of chartered tonnage in their global
operated fleet has also been reduced. On the other
hand, very few tramp owners are able to offer
today modern tonnage for the charter market, but
they will definitely be the ones to whom the operators
will go when their development will call for
extra capacity. Short-sea trade is in our opinion the
real window for future development and will lead
to an upturn of the chartering activity.
Given the incentive subsidies dedicated to the
Marco Polo programme that the EU is due to support
and the increasing demand of tonnage from
military organisations, the market could rebound in
the coming year. The age profile of the fleet is also
an element on which we expect a market upturn
due to a probable tonnage scarcity during 2003 and
2004 for good quality ships. There are numerous
projects to open new services, in particular those to
(Need for replacement on a 1 for 3 basis)
Past deliveries/demolitions
Need for renewal & expected demolitions
Deliveries
Demolitions
fight road congestion and the success of new routes
will be one of the major catalysts for expansion of
the fleet in the longer run. The longer distance the
“sea highways” will cover, the more standard unaccompanied
trailer ships will be needed.
Out of 25 pure ro-ro ships on order by end 2002
(leaving out PCTC and large ro-pax) only 6 are due
to join the tramp market : three from Stena, two
from AWSR and one from Bogazzi (sistership to the
Stena SEC built), all ranging from 2,600 to 3,000
lane metres. This clearly highlights how narrow the
market can be when it comes to availability of
modern tonnage for the charter market as seen
from a charterer’s point of view. The drawback for
tramp shipowners is that they have a very limited
number of serious players in front of them.
The economic downturn affecting the European
economies in 2002 inevitably impacted the
volumes of ro-ro cargo, and due to the delivery of
new vessels, the charter market has become quite
depressed during the whole year 2002 to the
extent that a number of large newly delivered units
could hardly find employment. The balance is
however fragile and its sensibility extreme in one
direction or the other. Without any doubt, there
will still be a need for ro-ro tonnage in the future
and some segments of the market will need to see
rejuvenation of the fleet by means of further
orders. In view of the competitive prices at which
tonnage can be built in China in particular, it is
quite likely that this country will provide a good
proportion of the ro-ro fleet in the coming years.
The Ro-Ro Market in 2002
87

88
Cetam Massilia
12,300 dwt,
3,000 lane meters,
22 knots, built 2002
by Dalian shipyard,
chartered to CETAM.
No ships
35
30
25
20
15
10
5
0
Finnlines
Cargo Service
Grimaldi
Naples
Shipping and Shipbuilding Markets 2003
P&0
DFDS Tor Line
Some newly established operators have opted for an
interesting alternative, buying good quality ships likely
to have another 5 to 8 years of life. The bet is quite
interesting as they will find themselves in some occasions
fighting the majors with ships purchased at low
prices and operated at low costs. In the container
sector, Mediterranean Shipping Company has proven
that this option can generate success stories.
Future Race to gigantism?
Similarly to the container market, there seems to be
thoughts in the market of building larger and larger
units. Projects exist to order trailer carriers with a
capacity in excess of 6,000 lane metres (about 3
times larger than the largest ships deployed in dedicated
trailer trades some 8 years ago). Of course the
larger the ships are, the greater the economies of
Fleet Status of Major Ro-ro Operators as at mid-2002
UECC
Suardiaz
Chartered in
Owned
Cobelfret
Grimaldi
Genova
UND Ro-Ro
This graph shows the globally high ratio of owned units versus
chartered units for the big majority of ro-ro short sea players.
The "exceptions" of Finnlines and Transfennica do not even
balance this phenomenon as their chartered units are to be
considered as "captive". The only real exception is Ferryways
recently established in short sea trade.
Harms
Transfennica
Norse
Merchant
Neptune Lines
Dart Lines
scale can be achieved. However one should always
bear in mind that to make these economies of
scale, vessels have concretely to attract enough
cargo to be loaded at a satisfactory level. Furthermore,
on many trade routes, the speed of loading
and discharging operations can significantly affect
transit-times that are amongst key performance
factors of the ro-ro concept, and gigantism could
eventually be an enemy to these.
Saying this, one should consider these challenges as
really serious and not those of dreamers. Despite
intentions to increase vessels’ size, the exercise of
deploying very large ro-ros on short-sea trades, will
probably be limited due to ports restrictions. However,
long term works to improve port infrastructures and
harbours will run in parallel to this trend with a view
to match ship specifications and shore facilities. ■
Stena Lines
Norfolkline
Ferryways
SOL
Niver Line

THE
REEFERSHIP
MARKET
IN
2002
Light at the end of the tunnel?
At the onset of 2002, an air of optimism
swept through the sector leading many to
believe that perhaps the 5 year-long depression
was finally coming to an end. As it turned
out, it was only a case of high hopes.
Over the past 5 to 6 years, reeferships have been
caught in a difficult context caused by both a surplus
of tonnage and a fierce competition from
containerships. Without a substantial reduction in
the transport capacity of conventional reefers,
freight rates stand no chance of seeing any real
improvement.
Although in terms of global commercial exchanges
the volume of perishable goods continues to grow
at a rate of about 2.5 % per annum, the capacity
of transport at regulated temperatures has increased
at a far greater pace with the introduction of
modern containerships.
Transport capacity for ships over 1,000teu rose by
11% in 2002 (171 ships delivered for 6,190,000teu),
equivalent to 180 million cubic feet of refrigerated
space, calculated on the basis of 13 % of the
40-feet reefer boxes capacity of containerships or
the equivalent of about 79,000 reefer plugs.
Competition
from containerships
Given the ongoing rivalry between pools of reefer
owners and container line operators, the time is
righ for a rationalisation of the industry.
After numerous mergers occurring during the previous
year, in February 2002 we witnessed the
creation of a new pool, “Reefer Ship”, which combines
the ships of Armada Reefer, Eco Ship and
Eastwind. The object of this new pool is to marry
a part of the fleet of small ships of Eastwind and
Armada with the larger ones of Lauritzen-Cool,
thus achieving better coverage of market requirements.
Together they represent approximately
50 ships and 20 million cubic-feet, including
BRS - The Reefership Market in 2002
89

Cote d'Ivoirian Star
565,384 cu ft, 174 feu,
110 reefer sockets, 21 kn,
10,350 dwt, delivered 1998 by
Shikoku Dockyard,
operated by NYK STAR Reefers.
90
BRS - Shipping and Shipbuilding Markets 2003
a considerable share of ships specialised in transporting
frozen food.
As with all recently formed pools, Reefer Ship members
seek to focus their energies on cost-cutting
measures and boosting the efficiency of their fleets,
rather than on competing against one another.
Important structural changes in exporting countries,
such as New Zealand and South Africa, have
forced owners to become more flexible in order to
face the container-based competition. A deregulation
in apple export procedures in New Zealand,
for example, accelerated the switch to containers.
As a result, if up until 1997, nearly all apples were
transported in reefers, today, one third of them is
moved via containers.
If previously reefer operators, such as NYK-Star
Reefers, Seatrade and Lauritzen-Cool, were used
to dealing only with large organisations, today, in
order to meet the needs of a multitude of small
exporters, they have set up “parcel” services in the
main fruit exporting countries of the Southern
Hemisphere.
NYK-Star Reefer launched two new seasonal services.
The first kicks off in New Zealand, with port
calls at Nelson and Napier, and serves Antwerp
and Sheerness for a transit time of 26 days. The
second trades between South Africa and Russia.
This situation has certainly benefited those exporters
fast enough to exploit the container-based
competition to put pressure on reefer owners. The
latter have countered by proposing fast ships,
equipped to fit refrigerated containers on deck,
and often with atmospheric control systems.
By maintaining the pressure on freight rates and
demanding a constant improvement in the quality
of transportation, shippers stand to gain the most
from the rivalry between reefer and containership
operators.
In the medium term, unless freight levels are high
enough to pay for the renewal of ships, there will
be such an imbalance that owners will be turned
away from the conventional reefer market.
Containerships are in the process of increasing
their market share at the expense of reefer vessels
on a number of routes. Already, nearly all frozen
food exports from South America (with the exception
of fish transhipments) destined to the Far East
travel in containers.
Exports in refrigerated containers out of Argentina,
Chile, and Brazil heading to the U.S. and Europe
are also on the rise.
Containership owners have been anticipating
events:
◆ Maersk-Sealand has put into service 6 ships of
4,500 teu, 800 reefer plugs, 24 knots, to operate
from the East Coast of South America to Europe
replacing ships of 2,800 teu.

◆ During the autumn of 2002, P&O-Nedlloyd
launched a new generation of containerships of
4,100 teu, 1,200 refrigerated plugs and 25 knots.
These 10 ships (7 P&O-Nedlloyd and 3 CP Ships)
replace the 2,700 teu ships on the Australia / New
Zealand to Europe / U.S. run.
◆ At the start of 2003, MSC is introducing a new
weekly service New Zealand / Europe competing
against P&O-Nedlloyd.
If in the past containerships, relative to reefers,
were characterised by slower speeds and inflexible
transit times, today, they steam at 25 knots and,
thanks to transhipment systems, are able to better
serve shippers’demands, be they small regular
volumes or more important seasonal sizes.
Despite these developments and the fact that the
global capacity of containerships fitted with reefer
plugs is more than double that of the specialised
fleet measured in cubic-feet, in reality only half of
perishable goods travel in containers. Thus, owners
of conventional refrigerated ships remain highly
efficient in their fleet operations and refrigerated
containers have yet to adapt to the most widespread
fruit trades, namely bananas and citrus fruit.
However, recent very low levels of freight rates
have discouraged owners from renewing their fleet
of conventional reefer ships. Were this situation to
persist, one has to question what the future of this
sector will hold. The prospects are all the more
dubious if in the meantime liner operators reduce
the transit times for refrigerated containers and
US cents/Cu ft/30 days
140
130
120
110
100
90
80
70
60
50
40
30
20
10
Reefer vessels spot time charter seasonal rates
(400,000 / 500,000 cu ft)
improve the efficiency of positioning empty boxes
in production zones in line with seasonal cycles.
The fleet
At the end of 2002, the orderbook was virtually
empty with only 3 ships under construction. Rock
bottom demolition prices meant that demolition
remained extremely low throughout the year.
Eighteen ships for a total of 6 million cubic feet
were sent to the scrapyards.
Paradoxically, activity on the second-hand market
for 10 to 15 year old ships was relatively buoyant.
There are two main reasons: first, purchases by existing
pool members of ships belonging to owners
who were seeking to exit the sector and secondly,
purchases by shippers or importers seeking a greater
degree of independence in their operations. The
latter was, for example, the case for Russian fruit
importers as well as for the fishing sector.
As a result, we witnessed a concentration of the
fleet in the hands of few owners – per se, not a
new phenomenon.
In terms of newbuildings, the market is in a state
of limbo, as prospects offer little encouragement
to investors for the moment. Activity is likely to
return when some 100 to 150 ships of over
250,000 cu ft built before 1978 are scrapped.
It is also worth noting that the latest large refrigerated
ships being delivered have a service speed of
23-24 knots and offer various innovations: pallet
0
Jan 1 Jan 15 Feb 1 Feb 15 Mar 1 Mar 15 Apr 1 Apr 15 May 1 May 15 Jun 1 Jun 15 Jul 1 Jul 15
1998
1999
2000
2002
2001
BRS - The Reefership Market in 2002
91

92
US cents/Cu ft/30 days
100
BRS - Shipping and Shipbuilding Markets 2003
90
80
70
60
50
40
30
20
end 83
end 4
Older/Palletized
Conventional
Modern/Palletized/Good speed, cont. cap. & gear
end 85
end 86
end 87
loading by lift, lateral doors independent from
container loading on deck, the absence of hatchcovers,
and an impressive refrigerated container
capacity reaching up to 70 % of the hold capacity.
These ships of about 600,000 cu ft, 12,000 dwt,
have a combined capacity (hold + deck) of 8,500
to 9,000 pallets.
Major events in the year 2002
Beginning in March 2002, there was a Russian
embargo on American poultry for sanitary reasons
(antibiotics, salmonella, etc.), which lasted until
mid May. It is estimated that American exports to
Russia dropped by 35 % over the year 2002. The
previous year Russia imported 1,36 million tons of
chicken and turkey, of which 1 million came from
the U.S..
Unfavourable weather conditions and the ensuing
torrential rains damaged the banana crop in Ecuador,
Costa Rica and Honduras. Australia, on the
other hand, suffered from an exceptional drought.
Amer Reefer reached an agreement with the New
York bankruptcy court and specifically with creditors
Vroon and Aston Financial Int. Its 7 ships will
remain in the Leonina pool of Lauritzen-Cool.
In Argentina, the crisis and the consequent devaluation
of the peso spurred exports. Despite the
fact that apple (1 million tons) and pear (500,000
tons) production fell by 20 % compared to 2001,
turnover from fruit exports increased by 20 %,
end 88
Reefer vessels - time charter rates
(400,000 / 500,000 cu ft - 12 months)
end 89
end 90
end 91
end 92
end 93
end 94
end 95
end 96
end 97
primarily towards Europe, the Mediterranean area,
and Russia.
In Panama, Chiquita plans to sell 3,000 hectares of
plantation to a co-operative of agricultural workers.
$90 million losses have accumulated in the
last 5 years in this country where irrigation costs
are extremely high.
A dock strike affected 29 ports on the West Coast of
the U.S. for 10 days in September, forcing a re-routing
of containerships as well as some banana carriers.
Some 260 ships were affected by this strike.
In Chile, fruit exports increased by approximately
9 %, riding on a strong dollar. 670,000 tons were
exported to the U.S., 437,000 tons towards Europe,
and 127,000 tons to Asia. Inversely, a strong
euro could lead to a preference of sales towards
Europe in 2003. Consequently, shipowners face
the enticing prospect of seeing tonnage employed
on the longer routes between Chile and Europe.
In New Zealand poor weather affected the squash
production and exports, mainly to Japan, fell between
25 to 30 %. The apple crop increased by
4 % compared to 2001 (17,7 million cardboard
boxes). With heavy frosts having affected the
apple orchards in the Nelson region, the outlook
for 2003 appears to be bleak, the next crop is
expected to produce 14,5 million cardboard
boxes. On the kiwi front, bad spring frosts, the
worst in 20 years, as well as hailstorms damaged
some of the plantations. The precise result of
end 98
end 99
end 00
end 01
end 02

Million cu ft
400
390
380
370
360
350
340
330
320
310
300
end 86
end 87
end 88
end 89
these climatic conditions remains to be determined,
but one can expect total kiwi production
volumes to be lower.
In Brazil, beef exports were strongly up (910,000
tons in 2002, 826,000 in 2001 and 575,000 in
2000) and the forecast for 2003 is 1,15 million
tons, thus becoming the second largest exporter
in the world after Australia.
Banana production in Ecuador declined, because
of both climatic reasons (heavy rain and cold temperatures
in March and April) and the mushroom
“black sigatoka”. In addition, threats concerning
a rise of Panama Canal tolls may endanger the
bulk of Ecuadorian exports as 60 % of exports take
the Canal route.
In South Africa the deregulation of the old commercial
system and the weakness of the rand helped
fruit exports (1,7 million tons of which:
950,000 tons of citrus fruit, 650,000 tons of
apples, pears, and grapes, and 100,000 tons of
avocados and other various fruit) resulting in a 6 %
increase in volume over 2001 and 10 % rise in
value, with two-thirds going to Europe.
In Costa Rica, between May and June the country
was hard hit by torrential rains, the resulting floods
damaging 40 % of its banana plantations. Consequently,
banana exports fell by approximately 6 %
in the year and the country could find itself being
displaced by the Philippines as the second largest
world exporter.
end 90
Reefer vessels fleet evolution
(vessels of 40,000 cu ft and above)
end 91
end 92
end 93
end 94
end 95
end 96
end 97
end 98
The freight market for conventional
ships of 350,000 to 500,000 cu ft.
First and foremost, the high season only lasted several
weeks. The market peaked at 90 cents and started
to drop off at the end of March. By the end of
April, some 50 ships were already idle in Cristobal.
Relative to 2001, the first quarter performed better,
but the second fared worse.
Having plunged in May, the market picked up in
June thanks to strong activity in citrus fruit, the
renewed movements of frozen chicken into Russia
and a reduction in the spot fleet, as numerous
ships had been laid up after a particularly disappointing
high season. It is estimated that during
the summer approximately sixty ships were laid up
with about 25 million cubic-feet capacity.
At the end of July 2002, the impact of the drop in
volume of banana exports from Ecuador (2 million
cardboard boxes less per week or the equivalent of
10 ships) was heavily felt in the spot market.
The low season has now increasingly shifted to
September / October, as during the period from
May to August transport demand for citrus fruit in
the Southern Hemisphere remains fairly strong.
There was an excess of optimism in the market
during the summer when freight rates were fixed
during the Canary Island export season (from
November to May each year) with an increase of
5 % to 75 cents, but there were only 6 ships fixed
of 420,000 to 440,000 cu ft instead of the usual 8.
end 99
end 00
end 01
end 02
BRS - The Reefership Market in 2002
93

94
BRS - Shipping and Shipbuilding Markets 2003
After that we had to wait until November for the
“Majors” (Chiquita, Dole, DelMonte, Fyffes-Geest)
to renew 12-month time charters at practically the
same conditions as last year, namely 62 cents for
the fastest ships with large deck capacity for
containers and on average 57 cents for ships of
450,000 to 500,000 cu ft (20 knots, 50–80 reefer
plugs for containers on deck).
For standard palletised ships of 400,000 to
500,000 cu ft (18 knots, without container capacity)
the market lingered around 40 cents for a 12
month period, but fixtures for longer periods (over
a year) remain a rarity, as operators prefer the pooling
system rather than to take risks on hypothetical
time charters.
In the small sizes (about 200,000 to 250,000 cu ft)
the market kicked off to a good first quarter then
in April fell back compared to the previous year.
The average yearly spot market was around 50
cents.
Conclusion
The number of players in the market of conventional
ships has been steadily shrinking. Two developments
lie at the heart of this. First, organisations
that have a monopoly on exports in the
Southern Hemisphere have broken up and,
second, containers have absorbed a share of the
market, either on the deck of conventional reefer
vessels, or on pure container vessels.
The spot market depends in practice on a selected
number of goods : fresh fruit such as bananas,
citrus fruit, apples, pears, kiwis, and pineapples ;
plus frozen chicken, mainly for bigger vessels and
fish, generally for smaller ones.
Russia continues to play a determinant role as a
regular charterer of full ships in terms of bananas
and fruit from the southern hemisphere and
Morocco, as well as American poultry. The recent
decision by Russians to acquire second-hand
conventional ships will probably lead to a reduction
in the number of fixtures on the spot market.
Competition remains fierce between the two
modes of transport (containers versus reefers) and
will become increasingly selective. Whilst the
container has taken a preponderant share in the
meat, milk products, and seafood sectors, conventional
refrigerated ships should be able to hold
their position in transporting fruit between specialised
ports and ports endowed with state-ofthe-art
fruit terminals. The latter control loading
programmes and focus on the re-distribution of
fruit to its final destination, thus playing a role as
a centre of distribution in a sector where the delivery
into the product market is sometimes too
complicated for liner owners to operate. To each
his own business… ■

THE
MARINE
INSURANCE
MARKETS
IN
2002
The year 2001 was hit with the biggest single
event in the history of insurance, now known
as the “9/11”, provisionally some $32 to $50
billion. One of the consequences has been the substantial
increase in premiums in 2001 covering all
sectors of the market. There was no way of foretelling
an event of such dimensions and the premiums,
which would have allowed insurers to meet
such an eventuality, were far from being collected.
Without specific premiums to cover claims, insurers
have had to empty their reserves. Substantial
resources have been brought into play by insurers
to try to handle all claims being made. Very likely,
insurers will fulfil their commitments and considerable
indemnities have already been paid out.
The market for marine insurance
and transport
The scope of losses generated over several years,
certain risky underwriting and the fall in the financial
markets, have either led to the disappearance
of several insurance players (notably marine) or
otherwise caused a plunge in the financial stan-
“A series of disasters”
ding of most insurance and re-insurance companies.
To try to meet these new difficulties, the
trend towards upping the premiums, begun in
2000, has had to be extended with a substantial
quickening of the pace in 2002.
This reversal of the cycle has however not produced
a strong growth since 1999 and the losses are far
from being absorbed. A study carried out by Norwegian
insurers and published by the IUMI in 2002
shows that overall premiums for hull and cargo
have increased but remain below the level of 1998.
Prestige
81,564 dwt tanker, blt 1976,
sinking off spanish coast
The Marine Insurance Markets in 2002
95

96
Shipping and Shipbuilding Markets 2003
According to analysts of the London market, premiums
are still insufficient to redress the balance.
Premium evolution 1999-2001
US$ million 2001 2000 1999
Index*
1999/2000
Index*
2000/2001
Global Hull 2,811 2,860 2,765 -0.90% -1.70%
Transport Cargo 6,224 6,622 6,752 -8.10% -5.90%
Marine Liability 656 699 528 32.40% -6.00%
Offshore/Energy 832 789 611 24.10% 5.40%
Total 10,534 10,980 10,753 -2.60% -4.00%
(IUMI – August 2002)
* This index is based on 44 out of 55 members of IUMI who
have published figures for their countries. It reflects the
movements in marine market volumes of these countries but
does not constitute an index for renewals. Certain countries
do not list out their premiums by category, therefore the total
of categories can be inferior to the overall total.
Trends in marine and transport
insurance in 2002
At the beginning of the year, the relative improvement
in the market gave some hope to marine insurers.
In fact, premiums were increased by a considerable
amount of around 15 % and for some
owners, increases of over 100 % for premiums and
also an increase of deductibles.
Placing old fleets or small units (one or two ships)
and/or presenting bad loss records to insurers, has
become extremely difficult without increasing rates
considerably and reducing the scope of cover tempting
some players to work with insurers whose creditworthiness
cannot always be counted on.
Despite the broad scope of measures taken by insurers
the year 2002 has proved to be a catastrophic vintage
for European insurers in general including marine
insurance. The two main reasons are as follows:
First a bad series of accidents:
During the months of September and October
2002, some twenty major and particularly dramatic
incidents absorbed between them nearly a third of
the volume of annual premiums in marine insurance.
The fire on the ‘Diamond Princess’, the attack
on the ‘Limburg’, the running aground of the ‘Hual
Europe’, ‘Ocean Lexington’ and ‘Treasure Bay’…
came to more than $900 million in the books of
marine insurers and their re-insurers.
Globally the results of the Clubs, members of the IG Group are negative:
$’000 20 Feb. 2002 20 Feb. 2001 20 Feb. 2000
Underwriting Result
And balance sheet results too :
- 109,004 - 266,379 - 387,514
Investment Income (net) - 50,121 90,569 360,096
Forex,Tax, etc - 56,307 - 59,081 - 41,745
Overall result
Source : Elysian
- 215,432 - 234,891 - 69,163
Very few insurers have escaped this series of disasters,
particularly as the misfortunes continued to
carry on throughout the last two months of the
year 2002 with notably:
◆ November 11th 2002: fire on board the containership
‘Hanjin Pennsylvania’ – a cost that could
reach close to $100 million,
◆ November 13th and 19th 2002: leak and shipwreck
of the tanker ‘Prestige’ off the Spanish coast
– a cost of some $ 42 million (including P&I),
◆ December 1st 2002: fire on board the sail schooner
‘Wind Song’ in Polynesia – costing $26 million
(total loss),
◆ December 14th 2002: collision in the English
Channel between the containership ‘Kariba’ and
the car-carrier ‘Tricolor’ - a cost which could slightly
exceed $100 million.
Even marine insurers, who might have been spared
from any of the above catastrophes, are however
deeply affected by the increase in re-insurance
costs. The hike in re-insurance premiums is the
result of disasters affecting the marine sector but
also other sectors such as natural disasters where
the losses, according to Munich Re, amount to $55
billion in 2002 of which $11.5 billion are insured.
Aviation insurance which has had a run of calamities
(hull and liabilities) of more than $6 billion in
2001, has turned around quickly in 2002 with total
claims estimated at $1.06 billion.
The P&I market is also affected. The P&I Club members
of the International Group (IG Group) have not
been spared by the losses over the last 3 years despite
a relatively stable level of accident claims.
For accounts ending February 20th 2002, it helps to
distinguish 3 groups of clubs:
◆ those more or less close to a balanced position
(North, Gard, West),
◆ the big losers (Swedish, London, UK, Britannia),
◆ the “enhanced profit” group, namely American
Club / Skuld and Steamship whose profits stem
from the inclusion of results of the significant
“excess calls” they made.
The average increase in P&I premiums in 2002 was
around 22 %, excluding excess calls imposed by
some Clubs. Market analysts predict losses situated
between $ 75 and $ 125 million for the underwriting
year ending February 20 th 2003.
For renewals as from February 20 th 2003, the Clubs
have announced general increases of 15 to 25 %
before re-insurance costs. The cost of the main programme
of re-insurance of the IG Group has increased
by about 40 %, this hike being differently
apportioned according to the type of ship.

Secondly, the drop in Stock Exchange performances
and its repercussions on the marine insurance
world:
The period when the financial results subsidised
the technical underwriting deficits has definitely
come to an end. The Dow Jones Stoxx Insurance
index lost 51 % after having dropped by 30.5 % in
2001. The first 10 European insurers (excluding
ING) have lost 192.2 billion euros in stock valuation
within a year. One has to add together the top
eight European stock exchange capitalisation, to
be able to match the number one in the world, the
American AIG.
The drop in the stock exchange market has continued
in 2002, primarily due to a lack of confidence
among investors following the shortcomings of big
companies particularly in the U.S..
The direct consequence for insurers (including)
marine is the absolute necessity to get balanced
technical results, without being able to count on
hypothetical financial profits.
At the same time, insurers have a tendency to look
for additional protection from their reinsurers,
whilst similarly, reinsurers have a tendency to reduce
their risk exposure, thus their cover capacity, as
they are themselves having a hard time to obtain
the cover they would like from their retrocessionaires
partners.
It is becoming more and more difficult for insurers
to balance the need for a return on investment and
at the same time to satisfy their shareholders, while
keeping sufficiently strong capital reserves as
demanded by their clients.
In such an unfavourable context and in an increasingly
uncertain climate, especially with the terrorist
threats, insurers have come out with what could be
called a “survival guide”:
◆ a more restrictive underwriting policy with as
consequence a lack of capacity,
◆ an increase in retention,
◆ coverages which are sometimes more restrictive
with notably the introduction of new exclusions:
- Institute Extended Radioactive Contamination
Exclusion Clause 01/11/02 (Cl. 356 A),
- Institute Chemical, Biological, Bio-Chemical, Electromagnetic
Weapons and Cyber Attack Exclusion
Clause 01/11/02 (Cl. 365).
The French market preserves
its financial standing
Despite a fairly depressing year 2002, the main
French companies involved in marine insurance
have put up a good resistance in the face of exceptional
deteriorating conditions.
They have posted solvency ratios above European
norms and the French market remains one of the
world top markets.
◆ French insurance market is number 5 within
world rankings, 2nd in Europe for life insurance, and
3rd in damage insurance.
◆ French insurance remains 2nd in the placement of
“International hulls” in the world (excluding Japan
which is mainly domestic).
◆ French credit insurance is number 1 in the world.
French companies in the market have a capacity to
adapt and have advantages linked to their size and
geographical coverage. Nonetheless they remain
cautious as to the future development in their operational
performance, given the volatility and uncertainties
in the financial markets.
Current difficulties are causing a new change in
outlook and are upsetting the classical approach to
risk finance. The catastrophes of the last two years
have forced insurers to reorganise themselves, to
reinforce their capital reserves and improve their
management skills.
Owners and other clients
In the particularly dismal context of marine insurance,
where many players are fighting for their survival,
actors in the shipping sector are also being
subjected to their own constraints within the market.
Operating ships is becoming more and more
costly, as much with international standards, which
are raising levels of responsibility of owners as with
the reinforced rules of security.
Insurers, who want to be attentive and selective in
their commitments, do not directly control either
the security or the quality of shipping operations or
the qualification of crews.
Due to this situation, insurers are tending to impose
technical constraints and supplementary charges
to their clients by introducing loss prevention programmes.
Nonetheless an intelligent and practical collaboration
between insurers and owners can also make
a considerable contribution towards market
results. The role of an insurance broker in establishing
a better communication between parties
and an appreciation of the constraints and susceptibilities
of both parties, should make for better
competitiveness and an improved quality of
services offered. ■
The Marine Insurance Markets in 2002
97

98
Shipping and Shipbuilding Markets 2003
Cap-Marine
Assurances & Réassurances S.A.
Shipping and transport insurance and re-insurance broker
Headquarter
4/12, Bd des Belges - BP n° 10 - 76001 Rouen Cedex - France
Tel : + 33 (0)2 35 98 26 46 - Fax: + 33 (0)2 35 98 32 58 - E.mail : rouen@cap-marine.com
Paris office
32, rue Notre-Dame des Victoires - 75002 Paris - France
Tel : + 33 (0)1 53 00 94 00 - Fax: + 33 (0)1 53 00 94 10 - E.mail : paris@cap-marine.com
Nantes office
92, quai de la Fosse - BP n°78704 - 44187 Nantes Cedex 4 - France
Tel : + 33 (0)2 40 69 31 96 - Fax: + 33 (0)2 40 69 29 55 - E.mail : nantes@cap-marine.com

FRENCH SHIPYARDS
DELIVERIES AND ORDERBOOK
IN 2002
Chantiers de l’Atlantique
Ships delivered in 2002
U 31 Constellation 2002 Royal Caribbean Cruises
Cruise vessel 91,000 gt – 1,019 cabins 294 m x 32.20 m on 8.50 m
1,950 lower berths Gas / Steam turbines - POD 39,000 kW 24 K.
X 31 European Stars 2002 Festival Cruises
Cruise vessel 58,600 gt – 783 cabins 251 m x 28.80 m on 6.60 m
1,566 lower berths POD 2 x 10,000 kW 21.7 K.
A 32 Mohammed V 2002 Moroccan Royal Navy
Frigate 2,950 gt 93.67 m x 14 m on 4.01 m
4 x 2,400 kW 20.5 K.
C 32 Coral Princess 2002 P&O Princess Cruises
Cruise vessel 88,000 gt – 987 cabins 294 m x 32.20 m on 8.00 m
1,950 lower berths Diesel electric - 2 x 20,000 kW 24 K.
Ships on order as at 1/1/2003
B 32 Hassan II 2003 Moroccan Royal Navy
Frigate 2,730 gt 93.67 m x 14 m on 4.01 m
4 x 2,400 kW 20.5 K.
D 32 Island Princess 2003 P&O Princess Cruises
Cruise vessel 88,000 gt – 987 cabins 294 m x 32.20 m on 8.00 m
1,950 lower berths Diesel electric - 2 x 20,000 kW 24 K.
G 32 Queen Mary 2 2003 Cunard
Cruise vessel 150,000 gt – 1,310 cabins 345 m x 40 m on 10.00 m
2,620 lower berths POD 4 x 20,000 kW each 29.35 K.
H 32 Crystal Serenity 2003 NYK
Cruise vessel 68,000 gt – 550 cabins 250 m x 32.20 m on 7.60 m
1,080 lower berths 2 x 13,000 kW 22.75 K.
I 32 Mistral 2004 DCN
J 32 Tonnerre 2005 -
LPD 199 m x 32 m on 6.20 m
Diesel electric - 15,000 kW 19 K.
K 32 MSC Lirica 2003 MSC
L 32 MSC Opera 2004 -
Cruise vessels 58,600 gt – 765 cabins 251 m x 28.80 m on 6.60 m
1,530 lower berths 2 x 10,000 kW 21.7 K.
M 32 Gaz de France Energy 2004 Gaz de France
LNG tanker 74,130 cbm 219.50 m x 34.95 m on 9.33 m
Diesel gas electric - 18,560 kW 18.20 K.
French Shipyards Deliveries and Orderbook
99

100
Alstom Leroux Naval
Shipping and Shipbuilding Markets 2003
Ship on order as at 1/1/2003
827 Beautemps-Baupre 2003 DGA
Research vessel 80.60 m x 14.90 m on 6.20 m
Accomodations : 25 pers. Mitusubishi diesel electric - 4 x 1,000 kW 14.50 K.
Constructions Mécaniques de Normandie
Ships delivered in 2002
Heloval 2002 Société Maritime Héloval
Motor yacht 42.10 m x 8.60 m on 2.75 m
Caterpillar 3508B M.E. - 2 x 895 kW 13.8 K.
- 2002 CFT
- 2002 -
Tank barges 637 t - 3,000 t 79.00 m x 11.40 m
- 2002 CFT
Tank barge 660 t - 3,130 t 82.50 m x 11.40 m
Ships on order as at 1/1/2003
Lady B 2003 Sugiton
Catamaran 32 m x 14 m on 1.80 m to 4.50 m
Yanmar 6LY2-STE M.E. - 2 x 309 kW 18 K.
- 2003
105 foot sailing ship 31.50 m x 7.20 m
Cummins CTA 8 300 bhp 11 K.
Mari-Cha IV 2003
Racing sailing ship 43.00 m x 9.00 m
Vigilente 2003 Affaires maritimes
Patrol boat 52.50 m x 9.00 m on 2.80 m
MTU 16V 4000M 70 21 K.

Chantiers Piriou
Ships delivered in 2002
C237 Albius 2002 Armement Sapmer
C238 Cap Horn I 2002 Armement Cap Bourbon
C240 Ile de la Réunion 2002 Comata - La Reunion
Long liners 55.49 m x 11 m
Caterpillar M.E. - 1,800 kW at 720 rpm 15 K.
C241 Jean Louis Vincent 2002 Scotto - Sete
Fishing boat 24.90 m x 7.20 m
ABC at 316 kW
C242 Surfer 198 2002 Surf
Crew boat 19.20 m x 6.00 m
Man 2842 LE 3 x 560 kW 28 K.
C243 Surfer 254 2002 Surf
C247 Surfer 255 2002 -
Crew boats 25.95 m x 6.20 m
MTU 12V 183 TE 72 4 x 610 kW 28 K.
C244 Nuevo Panchilleta
C245 Nuevo Elorz 2002 Fuentes
Tuna purse seiners 43.15 m x 9.50 m
Caterpillar 2 x 811 bhp
Ships on order as at 1/1/2003
250 Cap Saint Georges 2004 Armement Le Garrec
Trawler 44 m x 11 m
Mak 1,850 kW
252 - 2003 Surf
253 - 2003 -
Fast Intervention Support vessels 53.55 m x 10 m on 2.35 m
4 KTA 50-2 - 5,372 kW 27 K.
256 2004 Surf
AHTS UT 721 1,500 dwt 69.70 m x 17.20 m on 6.10 m
2,600 gt 4 BERGEN BMH8 x 3,600 bhp DP 2 FIFI 1 16 K.
259 2003 Les Abeilles
Tug 30.30 m x 10.40 m on 4.50 m
(diesel) 2 ABC 8 D2C - 1,766 kW 12 K.
French Shipyards Deliveries and Orderbook
101

102
Ships delivered in 2002
Shipping and Shipbuilding Markets 2003
FRENCH ORDERS
TO FOREIGN SHIPYARDS
IN 2002
Treci Maj (Croatia)
679 Bro Ellen 2002 Broström Tankers SA
Product and chemical tanker 37,300 dwt - 16 tanks 184 m x 30 m on 10.5 m
IMO II Sulzer 7,900 kW 15 K.
Orskov (Denmark)
221 N' Zinga 2002 Surf
236 N' Duva 2002 -
Platform supply vessels 72 m x 16 m on 5.90 m
UT 755L Bergen KR MB 9 2 x 2,005 kW 14.5 K.
Fincantieri (Italy)
6081 Danielle Casanova 2002 SNCM
Ro-ro passenger ferry 44,500 gt - 2,204 pass. 175 m x 30.40 m on 6.60 m
Wärtsila 9L46C type 37,800 kW 23 K.
Niestern Sander (Netherlands)
814 Adour 2002 Petromarine
Product and chemical tanker 14,800 dwt 140 m x 21 m on 8.06 m
IMO II MAK 6M43 5,400 kW 13.5 K.
Van der Giessen de Noord (Netherlands)
985 Mont-Saint-Michel 2002 Brittany Ferries
Ro-ro passenger ferry 34,800 gt 173.40 m x 28.50 m on 6.20 m
2,120 pass. 21,600 kW 21.5 K.
Viana do Castelo (Portugal)
211 FS Vanessa 2002 Fouquet Sacop
Product and chemical tanker 15,500 dwt 140 m x 23 m on 8.30 m
IMO II MAK 6,300 kW 14 K.
Astilleros Zamakona SA (Spain)
C-505 La Gironde 2002 Conseil Général de la Gironde
Double end ferry 3,324 gt - 600 pass. 71 m x 18.30 m on 2.60 m
135 cars 4 x 950 kW 14 K.
Izar (Spain)
365 Daniel Laval 2002 GIE Dragage-Ports
Trailing suction hopper 7,000 dwt - 5,000 cum 104 m x 22 m on 6.00 m
Dredger 2 x Wärtsila-9L26A 2,925 kW / 2,700 kW 13 K.
366 Samuel de Champlain 2002 GIE Dragage-Ports
Trailing suction hopper 12,150 dwt - 8,500 cum 117 m x 24 m on 8.00 m
Dredger 2 x Wärtsila-CW16V200 2 x 3,200 kW 13 K.
Yardimci (Turkey)
25 FS Diane 2002 Fouquet Sacop
Product and chemical tanker 10,048 dwt 118.37 m x 19 m on 8.22 m
MAN-B&W 4,440 kW 14 K.
Nacks (China)
008 Orientor 2 2002 Setaf-Saget
Bulk carrier 47,980 dwt 187.50 m x 31 m on 11.75 m
MAN-B&W 6,880 kW 16 K.

Zhejiang (China)
093 Artha 2002 Petromarine
Bitumen tanker IMO II 4,300 dwt 106.30 m x 15.80 m on 6.00 m
MAK 2,880 kW 14 K.
Keppel (Singapore)
3637 Athena 2002 Surf
MPSV 2,600 dwt 86.80 m x 73.50 m on 6.00 m
VS 4501 MAK 2 x 4,320 kW 14 K.
Hanjin (South Korea)
098 René Descartes 2002 FT Marine
Cable layer 8,150 dwt 142.50 m x 22 m on 7.40 m
13,500 gt 16,400 kW 16 K.
099 CMA CGM Eiffel 2002 CMA CGM
100 CMA CGM Puget 2002 -
Container carriers 58,000 dwt - 4,367 teu 280 m x 32.26 m on 13.00 m
24 K.
652 Elisa Delmas 2002 Delmas
653 Flora Delmas 2002 -
654 Gaby Delmas 2002 -
Container carriers 21,200 dwt - 1,634 teu 168.00 m x 27.20 m on 9.21 m
MAN-BW 15,805 kW 20.5 K.
Hyundai Mipo (South Korea)
002 Ile de Batz 2002 J/V Alda Marine
030 Ile de Bréhat 2002 -
Cable layers 8,200 dwt 139.70 m x 23.40 m on 7.20 m
DP II Diesel electr. 16,000 kW 15.5 K.
013 Kerel 2002 Socatra
Product tanker 37,000 dwt 185.50 m x 27.34 m on 11.20 m
IMO III 9,400 kW 15 K.
Samho (South Korea)
1033 Kergoat 2002 Socatra
Product tanker 7,500 dwt 115 m x 19.40 m on 6.50 m
Wärtsilä - twin screw 4,440 kW 13.5 K.
China SB (Taiwan)
773 Marie Delmas 2002 Delmas
774 Catherine Delmas 2002 -
775 Nicolas Delmas 2002 -
776 Julie Delmas 2002 -
Container carriers 31,000 dwt - 2,226 teu 195.60 m x 30.20 m on 10.50 m
B&W 17,506 kW 22 K.
Ships on order as at 1/1/2003
Meyer Werft (Germany)
Pont-Aven 2004
Roro passenger ferry 40,000 gt – 650 cabins 185 m x 31 m
2,200 pass. 58,000 bhp 27 K.
Damen (Netherlands)
511205 2003 Surf
511206 2003 -
511207 2003 -
ASD-Tugs 32.22 m x 11.70 m on 5.30 m
2 Ulstein Bergen 4,060 bhp 12.7 K.
Niestern Sander (Netherlands)
815 Dordogne 2003 Petromarine
Product and chemical tanker 14,800 dwt 140 m x 21 m on 8.06 m
IMO II MAK 6M43 5,400 kW 14 K.
816 2004 CMN
Research vessel 101.75 m x 15.85 m
Accomodations : 110 crew 2 x 2,970 kW 16.3 K.
French Orders to Foreing Shipyards 103

104
Shipping and Shipbuilding Markets 2003
Van der Giessen de Noord (Netherlands)
988 Pascal Paoli 2003 SNCM
Freight passenger ferry 35,000 gt 176 m x 30.50 m on 6.60 m
2,260 pass. 37,800 kW 23 K.
De Hoop International Lobith (Netherlands)
393 2004 Surf
Maintenance vessel 77.30 m x 18 m on 5.00 m
4 x 1,425 kW 13 K.
212 FS Thais 2003 Fouquet Sacop
Product and chemical tanker 15,500 dwt 140 m x 23 m on 8.30 m
IMO II MAK 6,300 kW 14 K.
Aker Brattvaag (Norway)
104 2004 Surf
PSV UT 755 L 72 m x 16 m on 5,91 m
2 x 2,005 kW
Yardimci (Turkey)
26 FS Mila 2003 Fouquet Sacop
Product and chemical tanker 10,048 dwt 118.37 m x 19 m on 8.22 m
IMO II MAN-B&W 4,440 kW 14 K.
Jinling (China)
02-0503 2004 Broström Tankers SA
02-0504 2004 -
Product and chemical tankers 37,500 dwt 185 m x 31 m on 9.50 m
IMO II MAN-B&W 8,580 kW
JLZ020401 Sea Plane One 2004 Louis Dreyfus / Hoegh
Roro carrier 5,200 dwt 150 m x 24 m on 6.60 m
2 x 8,400 kW
Nacks (China)
O26 2004 Setaf-Saget
Bulk carrier 55,000 dwt 189 m x 32.26 m on 11.10 m
MAN-B&W 8,200 kW 15.9 K.
Samsung (South Korea)
1457 2004 CMA CGM
1458 2004 -
1459 2004 -
1460 2004 -
1461 2004 -
1462 2004 -
1463 2004 -
1464 2004 -
Container carriers 72,500 dwt - 5,700 teu 263 m x 40 m on 14.50 m
MAN-B&W 26 K.
STX (South Korea)
1131 2004 Socatra
1132 2005 -
Product tankers IMO III 45,800 dwt 183 m x 32.20 m on 11.00 m
MAN-B&W 11,640 bhp 14.5 K.
China SB (Taiwan)
777 Louis Delmas 2003 Delmas
778 Irma Delmas 2003 -
Container carriers 31,000 dwt - 2,226 teu 195.60 m x 30.20 m on 10.50 m
B&W 17,506 kW 22 K.
796 CMA CGM Saint Louis 2003 CMA CGM
797 CMA CGM Saint Pierre 2003 -
798 CMA CGM Sainte Marie 2003 -
799 CMA CGM Saint Georges 2004 -
Container carriers 30,450 dwt - 2,200 teu 197.70 m x 30.20 m on 10.50 m
17,506 kW 21.5 K.

Shipbrokers since 1856
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Phone : 33 (0)1 44 35 12 34
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