With much of the world's shipping industry moving into holiday mode July is traditionally a busy month for the shipbuilding sector, as yards and owners in the Far East and much of Europe seek to tie up any loose ends before taking a well-earned break. But week 32 of 2013 will be remembered as an exception, with brokers reporting contracts were signed for 96 vessels of a total 5.532m dwt, an increase in contracting of 540% year-on-year.
And this came in the week China’s government announced it was putting a halt to any new shipbuilding industry projects for three years as the sector faces “unprecedented, severe challenges”.
Beijing’s new policy involves the implementation of a plan to upgrade and restructure the country’s troubled shipbuilding industry in a further move to stabilise China’s economic growth through reform.
Indeed, Wang Jinlian, the secretary general of China Association of the National Shipbuilding industry (Cansi) says a third of the country’s near 1,600 yards could be shut down within five years.
An indication of the keenness of customer and yard to secure a building berth before leaving for holiday is evident from the fact of the orders reported in week 32, some 70 of them were reported at an undisclosed price. Disclosed invested capital ran to just on $1.8bn for 26 new orders.
Piraeus-based broker Golden Destiny notes the largest volume of activity was in bulk carrier, container and special project segments, 42, 17 and 19 respectively. In addition, four tankers, five gas carriers, eight liners and a car carrier, were contracted.
Underlining the changing market climate, by comparison, Golden Destiny points out, in the same week in 2012, the were just 15 ships ordered, eight of them tankers, with no bulk carriers. There were four containerships and two units for a special project.
Another feature of the ordering over the tail and beginning of July and August is that of the 42 bulk carriers, 21 of them were booked in Japan for delivery in 2014 and beginning of 2015. Undoubtedly the Tokyo government's new policy of letting the yen find its own way has had many positive implications for the shipbuilding sector.
With a mix of government spending, central bank stimulus and other economic reforms, new Prime Minister Shinzo Abe has put an end to 15 years of deflation, with Japan posting an annualised 4.1% GDP growth in first quarter of 2013.
Greek newbuilding and s&p broker, Theodore Ntalakos, says Abe’s fiscal and monetary programmes have “already helped weaken the Japanese Yen and dramatically boost the profits of exporters, which of course include shipbuilders”. Ten of the bulkers ordered in Japan are for Chinese clients, while Japan’s Mitsubishi Corp and Kambara Kisen have respectively ordered two and one bulker each of 82,200 dwt in China.
Seventeen of the ever more popular ultramax bulker were ordered, adding to the 20 booked earlier in July. The ships are claimed to have 8% more cargo space and up to 17% reduction in fuel consumption than the traditional small panamaxes and supramaxes. Outside of the Japanese and Chinese ordering at their respective  domestic yards, Greeks were the most active in week 32 with five bulkers inked, all ultramaxes, and 11 containerships.
The containerships ranged in size from a pair of 9,000 teu units ordered by the Costamare / York Capital joint venture at $81m each, down to seven units ordered by Lomar Shipping (three of 2,190teu and four of 1,102teu). Lomar also exercised an option for two ultramax bulker carriers, making eight of this type now on order for the Greek owner.
By the time this article appears, it is likely four newbuilding contracts for LNG carriers linked to BG Group timecharters, will have be signed. Maran Gas Maritime / John Angelicoussis and GasLog / Peter Livanos are involved with Maran set to extend its LNG newbuilding book at Hyundai Heavy Industries by two ships and GasLog set to contract two more LNGs at its favoured builder, Samsung Heavy Industries.