Friday, November 25, 2011

CSSC & CSIC take a hit

CSSC and CSIC have been badly hit by the recession in the newbuilding orders.

An industry insider says both the Chinese state-owned shipyard conglomerates have only managed to bag around 9m dwt of the total 29m dwt of orders placed in China during the first nine months of this year.

The two giants inked around 26.3m dwt last year, he added.

A Shanghai-based broker said, "There is also a possibility that the shipbuilding market may be worse off next year and prices may come under further pressure."

Published : November 25, 2011


Newbuild price 4-M straight fall

Since the beginning of the H2 of the year, newbuilding price has been in a downtrend, as yards started to reduce prices to fill capacity in the face of the Eurozone crisis, depressed ship financing, etc.

Clarksons Newbuilding Price Index decreased for the four consecutive months, standing at 139.6p as of the end of October, down by 0.8p on previous month.

This is the first time the index has fallen below 140p since the end of March last year.

Since steel prices in China, Japan and South Korea increased in H1 2011, there has been a slight downward pressure on newbuilding prices. However, recently steel prices have started to fall.

Meanwhile, the overall orderbook as of the end of October remains at 6,451 vessels of a cumulative 393.9m dwt or 125.9m cgt or 251.8m gt, which down by 19% in comparing to the end of 2010 in terms of dwt.

In case of orderbook by shipbuilders, South Korea's Samsung Heavy Industries tops with 186 ships of 8.596m cgt and Daewoo shipbuilding & Marine Engineering takes the second place with 168 vessels of 7.893m cgt. Hyundai HI combined with its Gunsan yard follow with 169 ships or 6.808m cgt.

On the other hand, in orderbook by yard group, Hyundai HI Group including Hyundai Samho Heavy Industries ranks the first place in shipyard groups' share of orderbook, securing 10.255m cgt. Daewoo and Samsung come next with 8.617m cgt and 8.596m cgt, respectively.

There was a total of 80 ships or 2.3m dwt new order placed in October, up by 21% on September in terms of vessel number. AHTS and PSV sectors took the largest quantity of contracts (35%). However, only $2.6bn of contracts were placed, the lowest monthly amount in 2011.

Cumulative new order in the first ten months this year plunges to 1,015 vessels of 24.9m cgt, 4.46m gt, 55.4m dwt, down by 52% on 2010 in terms of deadweight.

South Korea stands at 304 ships of 12.3m cgt, totalling $43.6bn, way ahead of China with 419 vessels of 8.1m cgt, amounting to $14.8bn.

There were 68 ships of 5.2m dwt reported delivered in October. On the whole, a total of cumulative 1,976 vessels of 38.8m cgt or 80m gt or 129.5m dwt were delivered during January-October period.

Korea made deliveries of $41.8bn by October, which is 17% more amounts than China. South Korean yards have been successful to have delivered the greatest value of vessels year to date, despite 17% lesser vessels than China in dwt terms, which well shows Korean builders' concentration on high value ship.

In the year to October a total of 924 bulkers of 78.2m dwt were delivered and about 91.4m deadweight of bulkers are forecast to be delivered in 2011, up by 14% on last year.

Meanwhile, there were 59 vessels of 2.2m dwt sent for demolition in October, the lowest demolitions since February this year, in which 56 vessels were sold for scrap.

A total of 822 vessels (average age of 29.8) of a combined 35.3m dwt were scrapped by October, among which 42% in terms of the number of vessels having been demolished in India.

Published : November 25, 2011


Hyundai Mipo eyes PSV

An analyst is looking forward to Hyundai Mipo Dockyard's expansion into platform support vessel sector and its further valuation and dividend payment.

Analyst Jeon Jae-Chun from Daishin Securities of South Korea said, "In a share price below KRW 100,000 ($85.8), Hyundai Mipo holds stocks with attractive valuation. Adding 16% of dividend propensity, then about 3% of dividend yield can be estimated for 2011."

Added, "Also, its product diversification into PSV would give a bigger profit, with reduced discounts than those in its merchant ship sector."

Jeon expected that Hyundai Mipo would reach order intake of $2.5bn with additional new order for LPG carrier, bulker, etc by the end of this year.

Meanwhile, the South Korean shipbuilder has contracted a total of 46 vessels of $1.8bn, 55% of annual target, as of the end of October.

Published : November 25, 2011


Big3 undervalued-attractive

A depressed newbuilding commercial ship market along with financial crisis in Europe scares South Korea's investors toward shipbuilders.

According to Korea Exchange, share price of Big 3 has plunged by some 40% since July this year.

Most of shipbuilders, small-and-medium yards in particular, face restructuring and tougher competition, as they forecast decrease in new order would continue next year.

Large shipbuilding companies, on the other hand, seem to have no big difficulty in keeping a good record of new order in 2012 thanks to recent offshore-development boom in the world.

Experts see that Korean shipbuilders would benefit mostly in energy-related carriers and offshore production/development facilities.

Among overall 49 newbuilding LNG carriers ordered in 2011, Korean yards booked 41 vessels, including world-first LNG-FSRU and LNG-FPSO.

Growth rate of LNG trading is expected to record double digits, 11%, this year, compared with 21.2% in 2010.

Big LNG projects, including Sakhalin II of Russia (9.6m ton/yr), Indonesia's Tangghu (7.6m), Qatar's Qatargas 2-4 (31.2m) and RasGas III (15.6m), YLNG of Yemen (6.9m), etc., began operation in stage.

Moreover, the US government recently approved LNG export of 16m ton in a year, which is about 7.3% of annual trading in the end of 2010.

Also, LNG-related facilities used to be constructed onshore are shifting into offshore facilities, such as LNG-FPSO, LNG-FSRU, and others, of high economic feasibility and stability.

Analyst Uhm Kyung-Ah from Shinyoung Securities said, "Many shipbuilders would possibly be merged involuntarily, while Big3 rather worry about whether to expand offshore-related construction facilities or not."

Published : November 24, 2011


STX delivers 2nd drillship

STX Offshore & Shipbuilding held a delivery ceremony for its second built drillship.

The South Korean shipbuilding held a hand-over ceremony at its STX Dalian Shipbuilding & Offshore Complex in China on 22 November for 'Noble Globetrotter 2'.

This is a sistership of 'Noble Globe Trotter,' delivered in May this year and was ordered back in August 2010 by Noble Drilling.

The drillship is 189 meters in length, 32.2m in breadth with drilling capacity of up to 12,000-meter in waters.

STX has successfully delivered its second drillship and enhanced its standing on offshore facility market.

Published : November 24, 2011


ABB Azipod improved

ABB says that modifications to the design of its Azipod podded propulsion system have improved hydrodynamic efficiency by more than 2 percent.

The modifications include a newly optimized Azipod fin shape and a new pod cap structure, called the X-tail. The revised fin structure receives water flow from the propeller at a new, less acute angle, and its new curved design redirects the flow more efficiently. The unit's new X-tail, installed for the pod cap structure, straightens water flow on ejection from the Azipod propulsor, minimizing water swirling.

Royal Caribbean International's Radiance of the Seas is the first cruise ships to benefit from the new fin shape and X-tail. The Azipod modifications completed during her drydocking in May 2011.

The cruise ship's sailings from May to September demonstrated the benefits of the modification swhen compared to a sister vessel and her previous operational portfolio: more than 2 percent in hydrodynamic efficiency improvement was achieved.

Based on the positive result from the test, ABB will now include its new features in new Azipod XO units and provide refitting services to existing vessels equipped with older Azipod VO and XO units.

At the beginning of this year ABB together with Eniram introduced Azipod Dynamic Optimizer (ADO), a software tool which optimizes the Azipod toe angle. The tool has further improved unit efficiency and initial results from the trial installation on Holland America Line's Noordam indicate that 1.5 percent savings may be achievable on this vessel.

"Azipod propulsion has been in the market about 20 years and a lot of hydrodynamic improvements have been made during that time. However, from the hydrodynamic point of view the system still has a lot of potential. More new ideas will be studied, tested and applied to improve ship fuel efficiency" said Tomi Veikonheimo, chief hydrodynamist at ABB Marine.

Published : November 24, 2011


Wednesday, November 23, 2011

Hanjin ready to recover

South Korea's Hanjin Heavy Industries & Construction is expected to increase in new order, as it is expanding business in plant division and getting ready for operation.

Analyst Kim Hong-Kyun, Dongbu Securities, said that Youngdo yard is seen to take a while before a full operation, except part of newbuilding special ship.

Added, "However, Hanjin is possible to make gradual development in new order, as it began to push forward normalization after management-labor union settlement.

"Also, delightful news about its new order negotiation on floating liquefaction storage unit (FLSU) and small-sized LNG carrier is heard."

Also, construction of thermoelectric power plant in the Philippines, etc. Southeast Asia is anticipated as an expansion of plant division.

Published : November 23, 2011


Big3 overweight offshore

South Korea's major shipbuilders are forecast to maintain its high records of new order in 2012, along with recovery in offshore market.

Analyst Huh Sung-Duk from Hi Investment & Securities said, "Big 3's new order in 2012 is likely to decrease a bit than this year, however, strong offshore market would offset new order fall in commercial ship."

Huh expected, "About $39.3bn of new order in shipbuilding sector is estimated for Big 3 in 2012, while offshore sector would secure $21.5bn which exceeds that from boom period before global financial crisis."

Meanwhile, he forecast the largest new order in offshore sector totalling $9bn for Daewoo Shipbuilding & Marine Engineering next year, as $1.5bn of LNG-FPSO project from Petronas of Malaysia is getting closer to finalize during Q1 2012, etc.

Published : November 23, 2011


Hamworthy wins Korean LNG deals

Hamworthy has won contracts to install its technology on 21 LNG carriers under construction in South Korea.

The contracts have been secured with Norwegian owners Golar, AWILCO and Höegh LNG, and Greek owners MaranGas and Thenamaris.

Twelve Hamworthy Moss inert gas systems will be installed on a series of 156,000m3 capacity LNG carriers and 170,000m3 LNG FSRUs at Samsung Heavy Industries, seven inert gas systems will be installed on 160,000m3 capacity LNG carriers at Daewoo Shipbuilding & Marine Engineering and two inert gas systems will be installed on 170,000m3 LNG FSRU’s at Hyundai Heavy Industries.

“The upgraded system for the latest newbuildings is based on key experience from the Qatargas project,” said Morten Letnes, Marine Business Unit Director, Hamworthy Moss.

Published : November 23, 2011


Tuesday, November 22, 2011

Korea bigger gap in 2012

South Korea's shipbuilding market would face tougher competitions between the top tier and second tier and within each tier in 2012.

Analyst Lee Kang-Rok from Kyobo Securities forecasts that major three shipbuilders would have a hot battle in high-value ship market with high-end technology as well as minor yards.

Lee expected, "The second tier yards would see a difficult year with a fiercer competition among them next year."

Added, "That's because their orderbook have massively dropped by new order being concentrated on Big 3 this year."

Meanwhile, he suggested outperformance on shipbuilders' shares in 2012.

New order for offshore plant will keep being placed by oil majors and with the helps of governmental policy, LNG-related facilities will also have steady new order.

Lee, in particular, chose Daewoo Shipbuilding & Marine Engineering as the best share, as it would have the highest new-order momentum in Q4 2011, biggest profit recovery due to concentration on offshore plant and synergy-effect with affiliated companies.

Hyundai Mipo Dockyard was suggested as the next best share due to its largest benefits in case of recovery in bulker market.

Published : November 22, 2011


India eyes first LNG-FSRU

India pushes for its first LNG-Floating Storage Regasfication Unit (FSRU) project.

India's major integrated gas company, GAIL is now under a bidding of project management consultant (PMC) for its first LNG-FSRU. 

The LNG-FSRU and construction of terminal are to be located in the East coast of India.

GAIL plans to select a shipbuilder in six months, targeting a full operation by 2013. South Korean yards, along with Excelerate Energy, GDF Suez, MOL, Golar LNG, and others show interest on the project.

PMC would take charge of appointing shipbuilder for the project in Haldia.

Also, GAIL's second LNG-FSRU project is planned to be in India's southernmost Karkikal.

Meanwhile, Indian Oil, Ennore LNG and other Indian gas companies are revealed to be in energy import project in the east coast.

Published : November 22, 2011


Daewoo wins Israeli gas field project

South Korea's Daewoo Shipbuilding & Marine Engineering has signed a Head of Agreement (HoA) for sale and purchase of gas from Tamar and Dalit field in Israel.

Following the HOA signing ceremony, Daewoo would start a pre-FEED study for LNG-FPSO with European owners with targeting to sign a formal agreement by the end of next year.

If overall process carries out as planned, Daewoo would be able to produce LNG by the end of 2016.

As main owners of the gas field, Noble, Delek, Iramco, etc., are in review of newbuilding LNG-FPSO to produce LNG, Daewoo expects additional new order for LNG-FPSOs.

Daewoo announced that it would provide a total solution covering from energy development to sale for Israel, having about 2.8trn cubic meters of LNG reserves.

Published : November 22, 2011