General Shipyard / Shipbuilding News

[Michael H. Standart]

From The International Harald Tribune:

Ship prices expected to stay high in water

quote:

SINGAPORE: Hyundai Heavy Industries, the world's biggest shipbuilder, and its competitors will be able to keep charging record-high prices for at least two more years because rising demand has outpaced supply, shipowners said.

Executives at Varun Shipping, which has spent $320 million buying vessels this year, and at BW Shipping Managers, which runs the largest privately held oil supertanker fleet, said they expect current prices to hold for at least two years.

STX Pan Ocean, South Korea's biggest transporter of iron ore and coal, said it may have to keep paying top dollar even longer.

Sea carriers ordered a record $105.5 billion in new ships last year, enough to keep the largest yards working at full capacity until 2010. Expanding trade with China, the world's fastest-growing major economy, is fueling exports and imports.

"High building prices will remain for the time being, at least until 2011-2012, because of low capacity and strong growth in China," STX Pan Ocean's chief executive, Lee Jong Chul, said in an April 2 interview at Sea Asia 2007 in Singapore.

For the rest of this two page story, go to http://www.iht.com/articles/2007/04/11/business/sxships.php

With a surplus of tonnage needing replacement and a shortage of capacity to do the job, it's very much a sellor's market out there.

 

[Michael H. Standart]

From SeaNews Information and Consulting:

Shipyard to Be Replaced by Container Terminal

quote:

The management of the Odessa Commercial Sea Port has found a way to increase its container capacity. It is planned to build a container terminal of 300 thousand TEU's capacity on the territory of the shipyard Ukraine.

According to Kommersant, by the end of the current year the company is planning to send a project to the Ukraine Ministry of Transport and Communication. The company intends to have finished the building of the terminal by the year of 2010. The area of the terminal will be 19 hectare, the handling capacity will total 300 thousand TEU annually, the volume of investment - $70 mn.

Story at http://www.seanews.ru/default.asp?l=e&a=l&v=d&g=1&i=31808&n=1

 

[Michael H. Standart]

From Yahoo Singapore:

Daewoo Shipbuilding Secures US$1.66 BLN in New Orders

quote:

SEOUL, April 20 Asia Pulse - Daewoo Shipbuilding Marine and Engineering Co. (KSE:042660), the world's third-largest shipbuilder, said Friday it has received a combined US$1.66 billion in new orders this month to build 16 vessels

Story at http://sg.biz.yahoo.com/070420/16/47yfn.html

Also:

Hanjin Heavy Starts Building 1ST Philippine-Made Container Ship

quote:

SUBIC BAY FREEPORT, April 20 Asia Pulse - Hanjin Heavy Industries Corporation Philippines, Inc. (HHIC-PI), the local arm of South Korea's Hanjin Heavy Industries (KSE:003480), switched on the steel plate cutting machine that signaled the start of its production here Thursday.

The first steel cutting ceremony was held at the newly-built HHIC-PI shipyard at the Redondo Peninsula.

"It is our pleasure to host the first steel cutting ceremony for the building of 4,300 TEU [twenty foot equivalent unit] container ship here in Subic Bay. It is really a historic moment for our Subic shipyard," said HHIC-Phils. president and HHIC regional director Jeong Sup Shim.

Story at http://sg.biz.yahoo.com/070420/16/47ymn.html

Comment: I remember Subic Bay from it's days as a U.S. Naval Station. The closure of the base wasn't all that popular locally because of the negetive economic impact. It's good to see things turn around.

 

[Michael H. Standart]

From The International Harald Tribune:

Chinese shipbuilders plan to double capacity

quote:

SHANGHAI: China's two largest shipyard groups plan to double capacity by 2010, challenging South Korea as the world's top builder.

China State Shipbuilding, the nation's biggest, will have a potential 12.3 million deadweight tons output by 2010 from 6.02 million last year, said the company's director, Cao Yousheng.

China Shipbuilding Industry will double its annual capacity to 10 million deadweight tons, its director, Li Yanqing, said at a seminar in Shanghai on Wednesday.

Story at http://www.iht.com/articles/2007/04/26/bloomberg/sxchiship.php

 

[Michael H. Standart]

From Media Reports Washington:

Northrop Grumman chief tells Congress Biloxi shipyard is up to speed

quote:

WASHINGTON – Cost rather than capabilities was at the center of congressional questions to shipbuilding officials at a hearing Wednesday.

Philip Teel, president of Northrop Grumman Ship Systems, came to the House subcommittee on defense appropriations hearing expecting to have to defend his company’s ability to finish $9 billion in Navy shipbuilding work despite disruptions from Hurricane Katrina and a recent labor strike.

While Teel fielded questions from Rep. Norm Dicks, D-Wash., about the labor market on the Gulf Coast and the effect of the recently concluded strike, the vast majority of the committee’s questions to Teel and Michael Toner, executive vice president of marine systems for General Dynamics, focused on ways to overhaul the way Navy ships are designed, built and contracted to keep down costs to the federal government.

Story at http://news.medill.northwestern.edu/washington/news.aspx?id=34975

Comment: Katrina still haunts the Gulf Coast shipbuilding industry to this day and everything else as well, but it's good to see that things are looking up. So long as the industry is there and the jobs are available, they will rebuild.

 

[Michael H. Standart]

From Business Inquirer.net:

US shipping firms may stop upgrading work in Asia

quote:

NEW YORK--Growing pressure on the US government to enforce rules prohibiting overseas upgrading and rebuilding of US ships may start deterring shipowners from skirting the law and having the work done in Asia, industry sources said Friday.

The US shipping fleet is protected by the Jones Act, which requires US ownership, construction and crew for all coastal waterborne commerce. The Jones Act fleet is estimated to be about 150 vessels.

The Shipbuilders Council of America and Pasha Hawaii Transport Lines has sued the US Coast Guard, Department of Homeland Security and National Vessel Documentation Center at the Eastern District Court of Virginia to stop a three-ship conversion plan in China by shipowner Matson.

Story at http://business.inquirer.net/money/breakingnews/view_article.php?article_id=62996

Comment: Lawsuits or not, the plain fact of the matter is that it's cheaper to do the work overseas then it is in the USA. Money talks and the B.S. walks. If U.S. shipyards aren't competitive, the shipowners will find a way around all of this. The economics demand it.

And speaking of economics, from Business Economics.com:

Cargo costs set record as world runs short of ships

quote:

Cargo freight rates are soaring as the world runs out of ships to satisfy the extraordinary craving for fuel, grain and metals.

The Baltic Exchange’s Dry Cargo Index reached a record high of 6,230 points yesterday as the market responded to the shortage by propelling the cost of shipping to record levels. The Dry Cargo Index’s previous peak was at 6,208 points in December 2004.

The daily rate for the largest vessels, known as capesize — capable of carrying 172,000 tonnes of cargo — reached $106,289 yesterday, while panamax rates, for vessels that can carry up to 74,000 tonnes, reached $47,100 a day.

Story at http://business.timesonline.co.uk/tol/business/economics/article1717600.ece

Comment: In the shipbuilding business, it's rapidly becoming a sellors market out there. The shortage of hulls to meet the demand gaurantees that much, and this explains a lot about why China and Korea is seeking to expand it's shipbuilding industry.

 

[Michael H. Standart]

Even Bangladesh is trying to get in on the shipbuilding boom! From the Khaleej Times:

Bangladesh wins 100 mln dlr ship contract in boost to industry

quote:

DHAKA - Bangladesh’s main shipbuilder said on Saturday it had won a 100-million-dollar contract to build eight vessels, a deal seen as helping pave the way for the nation to emerge as a major shipbuilder.


Shipbuilding officials and local media said the contract was the impoverished South Asian nation’s single biggest export order.

Ananda Shipyards Shipways Ltd (ASSL) signed the joint deal with two German companies earlier this month to build eight ships with capacity for 325 containers by June 2010, company chairman Abdullahel Bari told AFP.

Story at http://www.khaleejtimes.com/DisplayArticleNew.asp?xfile=data/business/2007/April/business_April695.xml&section=business&col=

Comment: Okay, so $100 million divided by eight ships doesn't make for a lot of large ships, but it does get their foot in the door, and they claim they're "swamped with orders." Given the surplus of cargo to be shipped and the shortage of hulls to ship them on, this claim may well have a boulder or dozen of truth to it.

 

[Michael H. Standart]

From Bloomberg.com:

China Shipbuilders, Rivaling U.S. in WWII, to Cut Freight Costs

quote:

April 30 (Bloomberg) -- The cost of shipping coal and iron- ore is about to decline as the supply of cargo vessels overwhelms demand.

Japan, China and South Korea will produce so many vessels that shipping costs, now at an all-time high, will fall 40 percent by 2010, according to futures contracts traded privately between banks, transportation companies and hedge funds. The decline would hurt Antwerp-based Compagnie Maritime Belge SA, the world's largest commodities-shipping line, and Golden Ocean Group Ltd., run by Norwegian billionaire John Fredriksen.

``We're going to see the largest deliveries to the fleet that's ever been recorded,'' said Philip Rogers, 58, head of research at Galbraith's Ltd., the London-based shipbroker, who's been assessing freight markets for 30 years.

Story at http://www.bloomberg.com/apps/news?pid=20602006&sid=abuIzp_ZBXO0&refer=regional_indexes

 

[Michael H. Standart]

From Gulf News.com:

Ship prices to remain high for two years

quote:


According to a report by Exim India, shipbuilders will be able to keep commanding record-high prices for at least two more years because rising demand has outpaced supply.

Executives at Varun Shipping and at BW Shipping Managers Pte said they expect current prices to hold steady for at least two years. STX Pan Ocean Co, South Korea's biggest transporter of iron ore and coal, said it may have to keep paying top dollar even longer.

Story at http://www.gulfnews.com/business/Shipping/10121760.html

Comment: $105.5 billion in orders last year, up from $76.3 billion which was the record set in 2004. This isn't chump change.

 

[Michael H. Standart]

From the Thanh Nien Daily:

Major shipbuilding complex breaks ground in Vietnam’s delta

quote:

Construction of a VND1.7 trillion (US$106 million) shipbuilding complex began Monday in Hau Giang Province. The plant is expected to be a major booster to economic growth in the Mekong Delta.
The 290 hectare complex will produce ships of up to 70,000 tons. The state-owned giant Vietnam Shipbuilding Industry Group (Vinashin) has planned to pour some VND1.1 trillion ($68.7 million) in the plant.

Story at http://www.thanhniennews.com/business/?catid=2&newsid=27597

From FT.com:

Shipping rates rise on shortages of vessels

quote:

By Neil Dennis

Published: May 1 2007 19:49 | Last updated: May 1 2007 19:49

Commodity prices may be soaring on record demand for raw materials but so too are the prices for shipping these goods around the world.

This week, the Baltic Exchange’s dry freight index, a composite of prices for shipping dry commodities, hit a record high of 6,248. The index has risen 41 per cent this year.

The voracious appetite for raw materials in China and India, whose rapidly expanding economies have fuelled the current commodity boom, has stoked demand for the transportation of these goods.

Meanwhile, port congestion has led to delays and extra costs that shipping companies are passing on to customers.

Story at http://www.ft.com/cms/s/0a1ab362-f80e-11db-baa1-000b5df10621,_i_rssPage=9ff9d7a4-506d-11da-bbd7-0000779e2340.html

Comment: More signs that there are good times ahead for shipbuilders who can be competative in the markets. The west would do well to take note of what it is these guys are doing right.

 

[Michael H. Standart]

A follow up story on the Subic Bay facility from The Shipping Times:

New era as shipbuilding production begins in the Philippines

quote:

Hopes high for new shipbuilding hub

South Korea's shipbuilding giant Hanjin Heavy Industries Corp. - Philippines Inc. (HHIC-PI) has started production in Subic Bay of the 20 ships ordered from them by Germany and Greece..

The company, one of the world's largest shipyards, marked the start of its production two weeks ago with the switching-on of the steel cutting machine led by Hanjin Chairman Cho Nam Ho .

Story at http://www.shippingtimes.co.uk/item534_hanjin_philippines.htm

From BizChina:

Large sea transport group sees shipbuilding

quote:

China Shipping Group, the second biggest oceanic transportation conglomerate in China, plans to build its first shipyard by the end of 2008.

This is the second time in less than two months that a heavyweight centrally-administered state-owned enterprise has branched out into the shipbuilding industry.

Story at http://www.chinadaily.com.cn/bizchina/2007-05/03/content_865231.htm

 

[Michael H. Standart]

From Boston.com:

Shipbuilder Aker Yards sees profit dip

quote:

OSLO, Norway --Europe's largest shipbuilder, Aker Yards ASA, on Thursday reported a slight decline in net profit for the first quarter despite a sharp increase in revenue and orders.

The Oslo-based group said its net profit for the January through March quarter was 203 million kroner ($38.8 million) compared with 221 million kroner a year earlier.

Story at http://www.boston.com/news/world/europe/articles/2007/05/03/shipbuilder_aker_yards_sees_profit_dip/?rss_id=Boston.com+%2F+News

 

[Michael H. Standart]

From NEWSGD.com:

China's second largest sea transport group branches out into shipbuilding

quote:

China Shipping Group, the second biggest oceanic transportation conglomerate in China, plans to build its first shipyard by the end of 2008.

This is the second time in less than two months that a heavyweight centrally-administered state-owned enterprise has branched out into the shipbuilding industry.

The Shanghai-based shipping group spent 3.8 billion yuan taking over the assets and debts of the Jiangdu Shipping Company in east China's Zhejiang Province and renamed the wholly-owned subsidiary China Shipping Industrial Company (Jiangsu).

Story at http://newsgd.com/business/prospective/200705030015.htm

Comment: Stocks in shipyards might look like a good bet now, but if you're looking at the long term, you might want to consider the possibility that the shipbuilding boom now may well be sowing the seeds for a massive bust in the near future. It's happened before.

 

[Michael H. Standart]

From MSNBC Money:

Shipbuilder Hyundai Heavy Profit Soars

quote:

SEOUL, South Korea (AP) - Hyundai Heavy Industries Co., the world's largest shipbuilder, said Monday that first-quarter net profit skyrocketed on demand for high-priced oil tankers and container ships.

Hyundai Heavy earned 371 billion won (US$400.52 million; euro295.34 million) in the three months ended March 31, the company said in a statement. That was a roughly 15-fold increase from 22.9 billion won a year earlier.

Story at http://news.moneycentral.msn.com/provider/providerarticle.aspx?Feed=AP&Date=20070507&ID=6851823

From Yahoo International:

Samsung Heavy Wins US$1.29 BLN Shipbuilding Order

quote:

SEOUL, May 7 Asia Pulse - Samsung Heavy Industries Co. (KSE:010140), the world's second-largest shipbuilder, said Monday it has received a 1.19-trillion-won (US$1.29 billion) order to build eight container ships from an European company.

Story at http://sg.biz.yahoo.com/070507/16/48bex.html

 

[Michael H. Standart]

From The International Harald-Tribune:

Japanese shipbuilders boost production amid booming demand

quote:

TOKYO: Japan's shipbuilding companies are increasing production capacity amid robust demand caused by increased sea transport and strong growth in China and India, officials said Friday.

Ishikawajima-Harima Heavy Industries Co. will restart production at one plant and Kawasaki Shipbuilding Corp. is spending millions of dollars to expand its facilities, while Mitsubishi Heavy Industries Co. is also ramping up investment to churn out more ships.

In October, Ishikawajima-Harima's plans to resume building cargo ships at a plant in the central Japanese prefecture of Aichi, company spokesman Keiichi Sakamoto said.

Story at http://www.iht.com/articles/ap/2007/05/11/business/AS-FIN-COM-Japan-Shipbuilders.php