ECONOMY

Greeks buy more used ships

Ship orders internationally show a significant increase this year to August, reaching 1,677 ships and 89.9 million tons of capacity, from 86.5 million tons for the whole of 2005. These orders pushed the total number of all ships in operation to 5,654 across the world, stretching total shipping capacity to 280 million tons. In August another 94 new orders were added (8.4 million tons), and it is certain that, at this order rate, total shipping capacity will reach 300 million tons and 6,000 ships by the end of the year. Tankers over 10,000 dwt saw a capacity rise of 5 million tons in August, increasing from 1,398 ships and 113.7 million dwt in end-July to 1,427 ships and 118.7 million dwt. In Very Large Crude Carriers (VLCCs), the number of orders reaches 72 vessels, or 22.1 million tons, while the greatest rise in the suezmax category, after orders of 20 ships in August alone, reaches 13.2 million tons in total capacity on order. Dry-bulk carriers also saw a rising trend in orders. By July, orders reached 67.4 million tons and stretched to 72.7 million tons in August. The biggest increase was in Capers (in excess of 100,000 dwt), which grew from 145 ships and 29.4 million dwt in July to 170 ships and 34.1 million dwt. In August deliveries, of a total of 285 ships with a combined capacity of 16.81 million tons, the number of tankers came to 23 with a total capacity of 1.46 million dwt. Drop in tanker rates The VLCC market in the Arab Gulf is heading lower. The low presence of new loads has resulted in a drop in freight rates and is creating worries of further southward moves, despite the 75 charterings with loading dates up to mid-October. Rate levels have comparatively lost ground both for new ships and for relatively older ones. The decline in the price of crude oil, the lack of important political developments and the oversupply of capacity put freighters in an advantageous position compared with shipowners. Recent charterings have shown a significant decline, while the supply of ships limits the alternative solutions of shipowners for the remaining 15-20 loads for affreightment. The Atlantic market remains stable, while the West Africa-American Gulf loads may well drop, considering the latest charterings. In West Africa the presence of new loads appears limited and the lower levels of VLCC rates are expected to affect their suezmax market negatively as well. Limited loads have also pushed rates lower in the Mediterranean, while in Northern Europe charterings turned to the cheaper aframax ships. The Baltic market shows particular interest, with charterers covering all loading dates up to end-October at least. In the Far East, the Arab Gulf-India route has the usual traffic, as regards single-hulled ships mainly, with both suezmax and aframax ship rates doing well. Dry-cargo gains Market data show an increase in iron ore loads from Australia and Brazil and in wheat loads destined for the Far East. Until late August, an additional 70 million tons of various loads were shipped, representing a yearly increase of 5.3 percent. In the first eight months of the year, iron ore increased by 7.3 percent, wheat loads grew by 5 percent and coal shipments rose by 3.9 percent annually. The increased demand from Japan, particularly for iron ore, has offset reduced interest from China and Korea, which was due to recent local holidays, and taken the market up to $2,000 per day higher. The panamax and handymax markets have not seen forecasts for a decline in rates prove right, with the handymax market actually growing stronger mainly thanks to wheat and coal shipments.