The newbuilding business surprises for one more week

The newbuilding business surprises for one more week with the ordering ιnterest to be intense for large vessel size categories in the dry and tanker segment. Capesize units and the new newcastemax vessl design are in the frontline with Scorpio Bulkers of Monaco announcing
this week the placement of three units of 180,000dwt at Daewoo Mangalia of Romania for
about $54mil each and Winning Shipping of Hong Kong two units of 205,000dwt
at China's Nantong Cosco for about $58mil each. In addition, Germany's
Oldendorff Carriers continues to expand its fleet with an order for another
208,000dwt vessel at Hyundai Heavy Industries, which is reportedly to be
the sixth vessel in order for construction at this yard, with an option for
six more newcastlemax newbuildings.
The newbuilding prices stay very alluring for the investors as in May 2008;
the newbuilding cost for the construction of a capesize unit in South
Korean yard was about $100mil and in Chinese yard about $88,5mil. In the
tanker segment, ordering appetite for the construction of very large crude
carriers emerged high with Scorpio Tankers, DHT Holdings and Navig8/Oaktree
placing a strong volume of contracts - total 14 new orders at South Korean
and Chinese yards. The current newbuilding cost for the construction of a
VLCC unit at South Korean yard is estimated in the region of $92-$93mil,
from about $150mil in May 2008 and in Chinese yard, is in the region of
less than $90mil from about $137mil in May 2008.
In the dry market, firm spot chartering activity for dry bulk cargoes
maintains the firmness of the Baltic Dry Index despite the downward
revision of capesize and panamax rates. The Baltic Dry Index fell this week
below the 1,500 points mark with capsize rates heading to levels below
$18,000/day and panamax to less than $11,000/day. However, expectations for
the dry bulk recovery have not faded as spot chartering activity holds a
firm pace.
Last week the market was market with a significant increase of vessel
fixtures. According to Commodore Research, 137 vessels were chartered
during last week, from 117 vessels in the previous week with increases in
Chinese iron ore and thermal coal fixture activity. In the iron ore market,
27 vessels were chartered to haul iron ore to Chinese buyers last week, 6
more than in the previous week and 16 more than the trailing four week
average. Chinese iron ore fixture activity is now on increase for three
consecutive weeks and approaches the record levels seen during September.

Source: Commodore Research
Chinese thermal coal fixture activity is also in an upward movement as
Qinhuangdao coal port stockpiles remain far below the critical 7mil tons.
In the last week, 22 vessels are estimated to have been chartered to haul
thermal coal to China, 9 more than the previous week and 12 more than the
trailing four week average. Expectations are optimistic for the capesize
and panama charter rates as Chinese seem that will hold their appetite firm
in the demand for iron ore and thermal coal. Chinese iron ore port
stockpiles have increased to about 82mil tons, but they are still below the
record 101,5 million tons stockpiled in early February 2012 indicating
stability in the firmness of Chinese iron ore fixture activity.
On Friday November 22nd, BDI closed at 1483 points, down by 2.2% from last
week's closing and up by 32% from a similar week closing in 2012, when it
was 1090 points. Large vessel categories are on a downward incline, while
supramax/handy experience firm stability. The largest weekly increase is
recorded in the handy segment. BCI is up by 0.5% w-o-w, BPI is down 3.3%
week-on-week, BSI is up 2.8% week-on-week, BHSI is up 3.5% week-on-week.
Capesizes are currently earning $16,554/day, down by $1,592/day from last
week's closing and panamaxes are earning $10,880/day, down by $375/day from
last week's closing. At similar week in 2012, capesizes were earning
$16,412/day, while panamaxes were earning $8,091/day. Supramaxes are
trading at about $14,570/day, up by $408/day from last week's closing,
about 12% lower than capesize and 34% higher than panamax earnings. At
similar week in 2012, supramaxes were getting $7,566/day, hovering at 54%
lower levels than capesizes versus 12% today's lower levels. Handysizes are
trading at about $10,282/day, up by $382/day from last week's closing; when
at similar week in 2012 were earning $6,357/day.
In the wet market, VLCC spot rates keep firm with rates in AG-USG staying
at WS35 for two straight weeks and in AG-SPORE, AG-JPN routes at WS60 with
time charter equivalent earnings of about $50,000/day.  Stable outlook is
also kept in WAFR-USG and WAFR-China routes with no change from previous as
rates concluded at WS57.5 with time charter equivalent earnings of about
$43,000/day. One positive factor for the firm employment of very large
crude carriers is that Saudi Arabia's oil output has hit record levels of
around 10mil barrels/day for three consecutive months to offset the fall in
output from Libya, according to the US Energy Information Administration.
In the suezmax segment, WAFR-USAC rates keep flat at WS57.5-about
$13,000/day for three straight weeks, while in the B.SEA-Med route gained
2.5 points and concluded at WS60-$8,000/day. In the aframax segment, there
was a negative incline in the fixture activity of the Caribbean market with
rates in CBS-USG route losing 12.5 points to conclude at WS95-$14,844/day
and rates in the N.SEA-UKC route showed no change for three weeks by
staying at WS85-$14,546/day.
In the panama segment, the Caribbean market is more active with rates in
CBS-USG route gaining 7.5 points to conclude at WS100-$9,454/day. In the MR
segment, AG-JPN route is on a downward momentum with rates for 75,000dwt
vessels dropping by 3.5 points to WS68.5 and for 55,000dwt vessels by 6
points to WS90.
In the gas market, LNG spot rates for modern 160,000cbm tri fuel diesel LNG
carries are now at $100,000/day with a significant increase in chartering
interest that removes nearly all available tonnage in the West from
November through the first quarter of 2014. In the LPG segment, spot
fixtures concluded for very large gas carriers out of the Middle East Gulf
have kept freight rates at firm levels of low $60/tonne with time charter
equivalent earrings of about $40,000/day for voyages from the Middle East
to Asia. There are forecasts that earnings levels will remain robust of
about $30,000/day till 2016.
In the container market, the Shanghai Container Freight Index remains above
1,000points since the beginning of November with soft declines in
Asia-Europe and Asia-Mediterranean routes. The SCFI decreased by 0.1% last
week with 8.1% weekly decline in Asia-Europe route and 5.3% weekly decline
in Asia- Mediterranean. Rates in Asia-Europe fell to $1,213/TEU, but are
81% up from end-October levels and in Asia-Mediterranean route, rates
dropped to $1308/TEU, up by 85% from end-October. Several carriers have
already announced a new round from General Rate Increases to be effective
from mid-December to boost further rates.
In transpacific routes, rates in Asia-USWC route, moved up to $1885/FEU, up
by 9.7% week-on-week and down by 9.8% year-on-year. In Asia-USEC routes,
rates gained$106/TEU to conclude at $3184/FEU, up by 3.4% week-on-week and
up by 1.2% year-on-year.
In the shipbuilding industry, Japanese shipbuilders recorded firmness from
previous year's activity as figures from Japan Ship Exporters' Association
showed that member yards clinched 29 orders aggregating 1,400,570gt, up
from 17 orders of 902,790gt in the same month in 2012. Last month's orders
were lower than the 33 orders aggregating 1,202,350gt in September. Bulkers
continue to dominate the orders - Japanese yards received orders for 23
bulkers, up from 14 bulkers in October 2012. The October 2013 orders
included two VLCCs, two LPG carriers, two ore carriers, two Capesizes and
10 Handymax bulkers. One pure car carrier and three Panamax bulkers were
also ordered. The weakening yen and positivity about a recovery in drybulk
shipping has enabled Japanese builders to regain their competitiveness
against South Korean and Chinese yards.
In the shipping finance, Korea Develpoment Bank became became STX Offshore
& Shipbuilding's biggest shareholder after a sell-off by STX Corp. and its
affiliated shipping company, STX Pan Ocean. STX O&S said in a Korea
Exchange filing that KDB and two other parties now held 9,006,187 shares,
representing a 25.51% stake.
In addition, Korea EXIM Bank (KEXIM) signed various symbolic MOIs and
agreements with the European Bank for Reconstruction and Development, UK
Export Finance, Barclays, Societe Generale and Seadrill. The purpose is to
encourage financial cooperation as it looks to bring new opportunities for
exports from South Korea's economy. It is reported that KEXIM will support
by up to $1 billion John Fredriksen's Seadrill which has 17 offshore units
on order at South Korean yards valued at over $8 billion. It will
additionally provide $1 billion together with the EBRD for logistics and
infrastructure projects in Europe and Asia with an example given being the
Eurasia Tunnel linking Europe and Asia beneath the Bosphorus Strait in
Turkey.
In the capital market, Dynagas LNG Partners sold 12.5 million partnership
units raising $225 million in total proceeds, which represented 41.7% of
the company's pre-deal market capitalization ($539.5 million). Priced at
$18/unit, below range, the shares closed the next day at $18.01, largely
unmoved. The proceeds were used to repay debt and for general corporate
purposes.
, BW LPG, which owns a fleet of 36 gas carriers with a total carrying
capacity of about three million-cbm and with another 504,000-cbm on order,
has launched its IPO on the Oslo exchange. The target is to raise at least
NOK 1.66 billion ($280 million) and the share has been priced at between
NOK 40 and NOK 50. The shares will be prices on November 22nd and on that
day it is likely that the share will start trading also.
According to the offering documents the offering will comprise 82 million
shares being 41.5 million new shares, 30.5 million existing shares and an
underwriters' overallotment of 10.1 million shares.
Seaspan announced that it has completed the issuance of 3.5 million Class
A common shares through a public offering. Seaspan has authorized the
underwriters of the offering a 30-day option to purchase up to an
additional 525,000 common shares. The offering is expected to close on
November 25, 2013 and proceeds will be used for general corporate purposes,
potentially including vessel acquisitions.

GOLDEN DESTINY
RESEARCH DEPARTMENT