8 Shipgaz No 6 2010
Market Review
China in the driver’s seat Analysis That China is the motor driving the world economic development and is the white knight making sure that the crisis turned so fast is common knowledge. The ever-growing appetite for trade in goods in this gigantic nation has been a relief for shipping that has to absorb an enormous amount of new vessels ordered during boom times and that now is entering the market from the world’s shipyards. Although the order book has shrunk to around 35 per cent of the existing fleet according to data from Clarkson Research, it still means a lot of ships for the market to handle, just above 7,500 new vessels.
» China is taking a tighter grip not only on the demand side but also on world shipping supply. « As Platou points out in its latest monthly report, China is the main reason why the dry bulk markets have turned out better then expected so far this year, at least in the eyes of most shipowners. Although China’s long-haul shipments of
iron ore decreased the first half of the year, which has been a setback for the largest behemoths, the Capesizes, the main reason for dropping rate levels is that this sector has been exposed for a massive expansion. Although iron ore imports decreased by 3.5 per cent during the first three quarters of this year, other dry bulk commodities increased by 28 per cent, bringing a total increase of Chinese dry bulk imports to 7.5 per cent, compared to the corresponding period 2009. Add to this that increased world market iron ore and coal prices have made Chinese
North Sea: Too many vessels in the spot market offshore Towards the end of the year the offshore support sector is viewing the future with mixed feelings; concerned about the short term but more hopeful for the longer perspective. The North Sea market is struggling under too many vessels in the spot market, while activities are building up in other markets. Expectations are buoyant, as seen by a number of bond loans raised in the market by Havila, DOF and other owners. A new contracting boom for drilling vessels is also encouraging the longer prospects. Estimates for the Norwegian shelf alone indicate up to 20 new construction projects and at least 50 new subsea installations over the next decade. The Norwegian market for oil industry services is expected to rise from NOK 200 billion to 300 billion per year within 2016 – all depending on the present oil prices.
GBP 1,000 60
50
40
30
20
10
0
Week 50 1
5
10 15 20 25 30 35 40 45
Trico Marine and Sartor Offshore. Most of the boom upstarts from 2006/07 have disappeared, although a few are thriving. Polarcus, the Dubai-based seismic player with heavy Norwegian input, has returned to Ulstein for two X-bows seismic vessels priced at USD 168 million each. Another upstart, Marine Subsea with two X-bows well stimulation vessels has run into financial trouble as its first vessel, Sarah, is being readied at Ulsteinvik. Since July orders have been placed for 19 offshore vessels in the Scandinavian market with a total contract price of NOK 8.5 billion (USD 1.4 billion). The majority is for large MPSV – Multi-Purpose Service Vessels, basically large PSVs that may be fitted for subsea work, inspection or construction. Dag Bakka jr
North Sea term contracts and extensions Charterer Vessel Type Operation Statoil Bourbon Tampen psv 2 yrs option declared Statoil Olympic Princess psv 3 months firm + 4x1 mnth opt, October MLS Bourbon Monsoon psv 1 well supp Maersk Guardian (BP N sublet) Marathon UK ER Narvik psv 2 well supp J W McLean Petersons SBS Far Splendour psv 1 yr option declared N Coastal Auth Normand Jarl ahts 1 + 1 yrs support/tug standby Veolia Normand Pacific mpsv 3 yrs firm + opt, del January international contracts and extensions YPF Normand Baltic psv 4 months firm + 3 m opt, Jan, Argentina YPF Normand Skarven psv 4 months firm + 3 m opt, Jan, Argentina Noble Energy Oil Traveller psv firm until early 2012, Israel Petrobras Norskan/DOF Subsea subsea 5 yrs ROV, Brazil Petrobras Far Scotia subsea 5 +5 yrs ROV, Brazil Petrobras DOF Norskan tbn ahts 8 yrs (AH12 Skandi Iguacu) Maersk Oil Sea Tiger ahts 7 months Brazil
Source: Shipgaz Bergen, november, 2010
Source: Shipgaz Bergen, november, 2010
Offshore earnings
The North Sea market took a beating from the end of August that saw day rates for large anchor-handlers plummet from GBP 25,000 to 10,000 and below. Since the end of October day rates for such vessels have been in the GBP 8,000–10,000 bracket, which is well below break-even. Platform support vessels (PSVs) have been enjoying strong rates until September when the rates gradually slipped from GBP 15,000 to rock-bottom of 5,500 a few weeks later. At present there are 88 vessels in the North Sea spot market, divided evenly between anchorhandlers and PSVs, as against 80 at the same time last year. On any given day in November as many as 20–38 vessels were spot available around North Sea ports. The state of the market has decreed some owners to withdraw older PSVs for winter lay-up, notably