SEA - Netherlands Maritime Technology · SEA EUROPE SHIPBUILDING MARKET MONITORING REPORT 40 OF...

SEA EUROPE SHIPBUILDING MARKET MONITORING REPORT 40 OF APRIL 2016

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INDEX Summary........................................................................................................................................................ 4

News .............................................................................................................................................................. 4

Market Developments ................................................................................................................................... 4

Japan ...................................................................................................................................................... 4

1. Mitsubishi Heavy running behind on another cruise ship ..................................................................... 4

2. Japan’s newbuild orders in 2015 break 20 million GRT barrier ............................................................ 5

3. Japan emerges as top newbuilding investing nation ............................................................................ 5

South Korea ........................................................................................................................................... 5

4. S. Korea’s top 3 shipyards log 8 tln won operating loss in 2015 ........................................................... 5

5. Murky waters for South Korea’s struggling shipbuilders ...................................................................... 6

6. Korean yards won no orders in January ................................................................................................ 7

7. Korean shipbuilding orderbook slides to 10-year low ........................................................................... 7

8. DSME wins 1st order of 2016 ................................................................................................................ 7

China ...................................................................................................................................................... 8

9. First Luxury Liner Built by Waigaoqiao to Start Sailing by 2020 ............................................................ 8

10.Hundreds of thousands of Chinese shipyard workers face the axe ..................................................... 8

Europe ................................................................................................................................................... 9

11. Fincantieri inks several agreements with Iran ..................................................................................... 9

12. MSC Cruises Confirms Option for Two More Cruise Ships .................................................................. 9

13. Disney Cruise Line Orders Cruise Ship Pair from Meyer Werft ........................................................... 9

14. Fincantieri bags record orders, posts 2015 loss ................................................................................ 10

15. MSC Cruises Adding Four More Giants at STX France ....................................................................... 10

16. Superyachts Return Home for Upgrades ........................................................................................... 10

Global................................................................................................................................................... 11

17. Coast Guard might seek icebreaker design from outside US ............................................................ 11

18. UK North Sea to see 150 rigs scrapped in coming decade ................................................................ 11

19. Newbuilding investments up by $8bn in 2015 .................................................................................. 11

20. Offshore drilling market to see the worst recession ......................................................................... 12

21. Bulkers Squeezed Out........................................................................................................................ 12

Policy ........................................................................................................................................................... 12

22. CORE LNGas project wins EU backing................................................................................................ 12

23. EU backed LNG bunkering project starts second phase .................................................................... 13

24. Air Quality a Top Priority for European Ports .................................................................................... 13

25. Belgium Ratifies Ballast Water Management Convention ................................................................ 14

26.Ratification Just Around the Corner ................................................................................................... 14


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27. South Korea Setting Up USD 1.2 bn Shipping Fund ........................................................................... 15

28. Seoul in push to merge SHI with DSME ............................................................................................. 16

29. Yard unions urge crisis countermeasures ......................................................................................... 16

30. Korean yard workers urge for solution ............................................................................................. 16

31. Korean yards desperate for governmental support .......................................................................... 17

32. Ship Design Efficiency Standard Set to Low ...................................................................................... 17

33. Marine litter partnership meets ........................................................................................................ 18

Innovation ................................................................................................................................................... 18

34. World’s Fastest Ship Design Cuts Fuel Consumption by 74% ........................................................... 18

35. HANSEN develops feeder design series ............................................................................................. 19

36. Wartsila to design NB jack-up lift vessel ........................................................................................... 19

37. New LNG-Fuelled Concept Boxship Doesn’t Need an Engine Room ................................................. 19

38. DNV GL Adds Scrubber Ready Class Notation ................................................................................... 20

39. 2016 to be pivotal for offshore wind sector ...................................................................................... 20

40. The Netherlands: LNG-powered hopper barge launched ................................................................. 21

Fuels and materials...................................................................................................................................... 21

41. Energy demand for commercial transportation to grow till 2040 .................................................... 21

42. Demolition rates plunge to 2008 low ................................................................................................ 21

43. Layups slow to a trickle as freight rates and scrapping rise .............................................................. 22

44. Demolition prices up by $50 per ldt .................................................................................................. 22

Naval ............................................................................................................................................................ 22

45. Saudi Arabia gives green light to the largest contract in the history of Navantia............................. 22

46. Navantia given greater role in overhauling AWD programme .......................................................... 23

47. Australia selects Navantia for new replenishment ship .................................................................... 23

48. Fincantieri starts LSS construction for Italian Navy ........................................................................... 24

49. France receives first B2M-class vessel............................................................................................... 24

50. Brazil keeps combat ships programme afloat despite budget woes................................................. 24

51. China confirms build of second carrier .............................................................................................. 25

52. Call for Proposals: Pilot project on defence research ....................................................................... 25

53. Mr. Christophe Tytgat Appointed New Secretary General of SEA Europe ................................ 26

54. Upgrading Skills: Maritime Technology Sector to Set Up a European Skills Council ......................... 26

55. SEA Europe looks for Business Opprtunities in the US ...................................................................... 27

Shipbuilding Statistics .................................................................................................................................. 28

Figure 1 – Summary of activity in World Shipyards ............................................................................ 28

Figure 2 – Summary of activity in Chinese shipyards .......................................................................... 29

Figure 3 – Summary of activity in South Korean shipyards ................................................................. 30


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Figure 4 – Summary of activity of Japanese shipyards ........................................................................ 31

Figure 5 – Summary of activity of EU28+ Norway shipyards .............................................................. 32

Figure 6 – New Orders by Area and Ship Type .................................................................................... 33

Figure 7 – China 2015 New Orders by Vessel Type ............................................................................. 34

Figure 8 – South Korea 2015 New Orders by Vessel Type .................................................................. 34

Figure 9 – Japan 2015 New Orders by Vessel Type ............................................................................. 35

Figure 10 – EU28+Norway 2015 New Orders by Vessel Type ............................................................. 35

Figure 11 – Completions by Main Shipbuilding Areas and Ship Types ................................................ 36

Figure 12 – World Orderbook by Area ................................................................................................ 37

Figure 13 – Value of deliveries by main Shipbuilding Areas ................................................................ 38

Figure 14 – Value of the New Orders by main Shipbuilding Areas ..................................................... 38

Figure 15 – Value of Orderbook by main Shipbuilding Areas .............................................................. 39

Figure 16 - Evolution of Global Investment in Newbuilding Activity: ................................................. 39

Figure 17 – Investment by Owners and Builders Area ........................................................................ 40

Figure 18 – Orderbook and Investment by Shipowner Nationality..................................................... 40

Figure 19 – Orderbook by Shipowner Nationality and Shipbuilding Country ..................................... 41

Figure 20 – European Owners’ Orderbook by Vessel Type and Shipbuilding Area ............................. 42

Figure 21 – SMRC Turnover from 2006 to 2015 .................................................................................. 43

Figure 22 – Monthly Newbuilding Price Index .................................................................................... 43

Figure 23 – Bunker Fuel and crude Oil prices Long Term .................................................................... 44

Figure 24 – Bunker Prices Short Term ................................................................................................. 44

Figure 25 – Ship Scrapping .................................................................................................................. 45

Figure 26 – Materials Price .................................................................................................................. 45

Annex Tables - Summary of Ship building Activity* .................................................................................... 46

Table 1 –Orderbook by Ship Types - 31.12.2015 ................................................................................. 46

Table 2 – Orderbook by Country - 31.12.2015 .................................................................................... 47

Table 3 – New Orders by Shiptypes 2015 ............................................................................................ 48

Table 4- New Orders by Country 2015 ................................................................................................ 49

Table 5 – Completions by Shiptypes 2015 ........................................................................................... 50

Table 6 – Completions by Countries 2015 .......................................................................................... 51

Notes ........................................................................................................................................................... 54


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SUMMARY

Despite the global orderbook continued growing in 2015, new orders intake decreased compared

to the year before. Low oil prices have seriously impacted the maritime technology industry.

Companies especially dedicated to the design and manufacturing of offshore vessels and

technologies are seeing their orderbook and sales decrease considerably. In South Korea, the

main 3 shipbuilders have reported a loss of $ 7bn due to the cancellation and postponement of

offshore projects. Some European companies are also suffering the decrease in offshore activities

and are immersed in restructuring processes.

Demand for bulk carriers has also decreased considerably hit by the existing overcapacity in the

shipping market and consequent low freight rates. The slowdown of the Chinese economy is

pushing raw materials prices further downward hurting especially the bulk market segment.

Only Japan and Europe had increased their orderbooks. In the case of Japanese yards, the higher

new order intake responds to the competitive situation of the Yen in the export market after the

government decided to devaluate the Yen back in 2013. In the case of Europe, the increase in

new orders is led by a growing demand on passenger ships (both cruise ships and clean ferries)

and of other non-cargo carrying vessels.

NEWS

MARKET DEVELOPMENTS Japan

1. Mitsubishi Heavy running behind on another cruise ship

Mitsubishy Heavy Industries is expected to push back delivery of a cruise liner to a Carnival

affiliate by at least half a year, exacerbating potential losses from the project. The change affects

the second of two ships under construction for Aida Cruises at Mitsubishy Heavy’s Nagasaki

shipyard. Thousands of technicians are working on the vessel “We’re using know-how gained from

[building] the first ship to improve construction methods and logistics management for the second

ship” a company official said. This includes implementing systems to keep track of parts and

materials, as well as using simple elevators rather than large cranes to get furniture and other items

into cabins. Delivery of the first ship was initially slated for March 2015. But it has already

been pushed back three times over such factors as design and specification changes, with no

date currently set. Small fires broke out inside twice this month. Mitsubishy Heavy still expects

to deliver the vessel by fiscal year-end, saying in a statement that it is “confident that the fire will

not affect the ship’s first cruise scheduled to begin on April 30.” The schedule changes have kept

personnel and other resources from moving over to the second ship as planned, resulting in the

expected delay from the original time frame of this coming March. The order for the two ships

likely came to about 100 billion yen ($844 million).

Mitsubishy Heavy has booked more than 160 billion yen in related extraordinary losses,

including spending on additional personnel and materials. The delay on the second ship has

raised concerns that further losses will follow. The company now sees group net profit rising 18%

to 130 billion yen this fiscal year. Demand for new ships, particularly bulk carriers for such cargo

as iron ore, has slowed as China’s economy has cooled, and competition with Chinese and South


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Korean rivals is fierce. Mitsubishy Heavy has tried to use cruise ships, a growing market, to

generate steady profits. But the business is still not making money because of the repeated delivery

delays, which could force the company to rethink its strategy. Nikkei Review, 29-01-2016

2. Japan’s newbuild orders in 2015 break 20 million GRT barrier

Newbuilding order volume for Japan's shipbuilding industry in 2015 achieved a high level

exceeding 20 million grt after eight-year hiatus since 2007. According to statistics released by

the Japan Ship Exporters' Association (JSEA) on Jan. 14, Japan's export ship contracts in January-

December 2015 totaled 424 ships of 22.22 million grt, up 50% year-on-year on a grt basis. With

successive last-minute orders meant for skirting new regulations, the 2015 contract volume

achieved the fifth largest after 1973 of the oil shock and shipbuilding booms in 2003, 2006 and

2007. Also conspicuous was the massive increase in orders for tankers and containerships, given

the prolonging slump on drybulk market. With orders other than bulkers accounted for more than

half, Japanese shipyards have largely changed their order-taking policies.

Successive last-minute orders before new regulations. Behind the pushed up annual order

volume at Japanese shipyards are the effectuation of Harmonized Common Structural Rules (H-

CSR) in July 2015 and Tier-III NOx regulations in January 2016. Due to massive increase in

construction costs to cope with new regulations as well as necessary review on designs, moves

to conclude contracts prior to rules effectuation succeeded. Kaiji Press, 18-01-2016

3. Japan emerges as top newbuilding investing nation

Data from Clarksons shows Japan was one of the few top shipowning nations that increased

newbuilding investments in 2015. In total, Japanese companies are estimated to have placed

newbuilding orders worth $10.2bn, up 13% on year and topping rivals in all other countries.

The figure, the highest seen from Japanese owners this decade, came as weak rates plagued most

shipping sectors except for oil and liquefied petroleum gas shipping. Those newbuilding orders,

nearly all of which went to Japanese yards or their overseas subsidiaries, included 77 bulk

carriers and 30 containerships — two sectors hurt by persistent overcapacity. “My gut feeling

is that they are ordering to replace the older tonnage in their international trading fleets [that was

redeployed in cabotage trades],” Mr Krishna said. Of other top shipowning nations, the Greeks

adopted a very different attitude. Greek owners placed newbuilding orders worth $6.2bn in

2015, down 49% on year and the lowest this decade. Newbuilding investments from Chinese

owners reached $9.6bn, also significant lower than the 2014 level of $12.6bn. Those from owners

in Singapore fell to $2.1bn from $8.2bn. Newbuilding contracts from US owners were worth

$6.4bn, down 52% on year. German owners placed orders worth $3.4bn, compared with $4.5bn in

2014. Investments by Norwegian firms dropped to $2.6bn from $6.9bn. Bucking the trend,

South Korean owners raised investments to $3.5bn from $1.3bn. Orders from Hong Kong

companies were worth $2.2bn, up from the year-ago level of $1.8bn. Danish investments jumped

to $3.9bn from $1.6bn, driven by Maersk Line’s jumbo ULCV orders. Lloyd’s list, 09-02-2016 South Korea

4. S. Korea’s top 3 shipyards log 8 tln won operating loss in 2015

South Korea’s big three shipbuilders probably posted a record operating loss in 2015, stung by a

combination of a prolonged industry slump, a series of order cancellations and a delay in the

construction of offshore facilities, data showed Thursday. According to the industry data, the top

three shipyards — Hyundai Heavy Industries Co., Samsung Heavy Industries Co. and Daewoo

http://www.lloydslist.com/ll/sector/containers/article471953.ece


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Shipbuilding & Marine Engineering Co. — are estimated to have racked up a combined

operating loss of more than 8 trillion won (US$6.66 billion) last year. If confirmed, it would

mark the first time for all of the nation’s three largest industry players to register operating losses.

Daewoo Shipbuilding & Marine Engineering’s 2015 operating losses are estimated to be about 5

trillion won, with corresponding figures for Hyundai Heavy Industries and Samsung Heavy

Industries reaching 1.5 trillion won and 1.7 trillion won each. In 2014, their combined operating

losses hovered above 2 trillion won. An industry watcher said the big three shipbuilding companies

put up the worst performance last year. “It is the first time ever that the shipbuilding industry has

chalked up such a dismal result,” he said. “The situation in 2015 was worse than during the

country’s foreign exchange crisis in the late 1990s.” Daewoo Shipbuilding’s huge losses came

because of increased costs rising from a delay in the construction of low-priced ships and

offshore facilities. Hyundai Heavy Industries is estimated to have posted operating losses for the

eighth consecutive quarter in the October-December period of 2015. Samsung Heavy Industries,

meanwhile, is the only player among the three that is expected to post a profit for the fourth quarter

on the back of its efforts to offload its potential burdens over the past three quarters. Making matters

worse for the shipyards, market watchers expect them to continue to hemorrhage this year as

the global shipbuilding industry is unlikely to turn around. The stuttering shipbuilding sector

is feared to come as a major drag on South Korea since it is one of the key growth engines for

Asia’s fourth-largest economy, along with electronics and automobiles. Hellenic Shipping News, 08-01-2016

5. Murky waters for South Korea’s struggling shipbuilders

It is an undisputable fact that the blow of the economic downturn shook virtually all industries to

the core, with lingering effects still seen today. In the global shipbuilding industry, weakened

demand for new vessels, followed by a plunge in oil prices that inhibited offshore exploration left

players in the sector reeling and seeking to diversify their operations. Undoubtedly, the fiasco

managed to overturn former industry leaders and put giant, profit-making companies at the mercy

of creditors and their national governments. South Korea is one such example. This summer, the

country's Big Three companies, and the world's three biggest shipbuilders - Hyundai Heavy

Industries, Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering - reported

a record combined loss of $4.4bn in the first half of 2015. At the end of October, South Korean

news agency Yonhap quoted industry analysts predicting that combined operating losses will

further snowball to reach $6.2bn by the end of the year. Relentlessly depressing quarterly reports

from The Big Three led to a steep fall in their respective stocks in July. With its leading shipbuilders

in free fall, in August South Korea fell behind China and Japan to become the third largest

shipbuilding country, a big blow for a country that usually tops the list.

With hindsight, their foray was a failure. Struggling with the technology required for offshore

mining, the companies faced a slow production process, missing deadlines with clients and

having to pay out of their own pockets before the equipment was delivered. The recent plunge

in oil prices further hindered exploration and the formerly booming offshore sector suddenly dried

up. The best example of this venture's failure is Daewoo, which posted its current losses after falling

one year behind schedule on an order for four oil rigs for Norwegian company Songa Offshore.

The order was placed in 2011, but the first oil rig reached its North Sea destination only in

June 2015. As a result, the client withheld payment and Daewoo had to pay out of its own pocket

for material, labour and other expenses, which cost the company dearly. "The biggest reason why

shipbuilders are struggling is because of the delays in offshore rig projects, and until the deliveries

are made, these projects will continue to weigh on the shipbuilders' profit," Hana Daetoo Securities

analyst Park Moo Hyun told Bloomberg. "Although it's difficult to say when the companies will

be able to turn to profit, I think it will take at least another year for them to recover from the

http://www.hellenicshippingnews.com/s-koreas-top-3-shipyards-log-8-tln-won-operating-loss-in-2015/


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aftermath," he said. After the failed attempt to capitalise on the offshore market, shipbuilders have

turned their attention back to commercial ships. Ship Technology, 04-02-2016

6. Korean yards won no orders in January

Korean major shipbuilders failed to win newbuilding contracts for the month of January this

year, reflecting a deep recession of the industry clearly. Some Chinese and Japanese shipbuilders

signed newbuilding contracts in January 2016, while Korean yards failed to receive any orders

during the same period. An industry player said, “It was the first time Korean shipyards fail to

secure orders even though January is regarded as low season”. While new orders already

decreased due to slump in shipping market and prolonged dip in international oil price, newbuilding

industry has been very slack early 2016 after a rush of orders, which particularly occurred in

December last year in an attempt to avoid new environmental regulations. Park Dae-Young,

Chairman of the Korea Offshore & Shipbuilding Association (KOSHIPA), attended 2016 new year

meeting of shipbuilding and offshore industry held at Nurimaru APEC House, Busan, Korea, on

January 14 and stressed that the year of 2016 will continue to see the low oil prices, a rise in

the rate of interest from the US, slowdown of Chinese economy that the industry needs to

accumulate competitiveness as it is getting hard to win orders. Asiasis, 03-02-2016

7. Korean shipbuilding orderbook slides to 10-year low

The order backlog at South Korean shipyards has fallen to its lowest level in 10 years, according

to data from Clarkson Platou. The nation’s shipbuilders had 28.44m cgt of orders as of end-

February, the first time in a decade the backlog has fallen below 29m cgt. South Korea’s

orderbook is now a long way behind China’s 36.79m cgt. Other new data out of South Korea shows

how shipbuilding is declining as a nationally important industry. The top 100 Korean companies

in terms of market capitalisation have changed dramatically over the past 10 years. CEO Score, a

management evaluation site, investigated the top 100 companies in terms of market capitalisation

in Korea, America, Japan, and Europe from 2006 to 2015. The results showed that the Korean top

businesses in 2006 were mostly from ‘smokestack’ industries such as shipbuilding/machine

equipment, construction/building materials, IT/electronics, petrochemicals and auto part

manufacturing. However, the rankings changed dramatically in 2015 to the service sector,

petrochemicals, construction/building materials, IT/electronics, distribution, and food/beverages.

Shipbuilding-related companies now make up just seven of the top 100 Korean conglomerates. Splash 24/7, 04-03-2016

8. DSME wins 1st order of 2016

Daewoo Shipbuilding & Marine Engineering has recently succeeded in winning the first order of

this year, however delivery of one of its offshore facilities has been postponed for a year. First of

all, the Korean shipbuilding giant won two tankers at the end of March, achieving the first

order of 2016. According to its IR data for April, Daewoo has recently been awarded two tankers

at approximately $130m in total. Considering the price, the vessels are thought to be Suezmax ones.

Meanwhile, Daewoo announced through a regulatory filing on April 7 that it agreed with an

European owner to delay delivery of one fixed type of platform. When both companies signed

a contract worth around $1.761bn to build the platform in December, 2012, the deal was originally

supposed to run until April 15, 2016. With the latest postponement, however, the delivery has been

pushed back to April 15, 2017. Daewoo won a fixed type of oil production platform (80,000 barrels

per day), which is slated for operation in the Mariner field on the UK Continental Shelf (UKCS),

from Statoil of Norway in December, 2012. Asiasis, 8-4-2016


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China

9. First Luxury Liner Built by Waigaoqiao to Start Sailing by 2020

A senior executive from Shanghai Waigaoqiao Shipbuilding Co. Ltd. announced on Wednesday,

Dec. 2, that the construction of the country's first luxury cruise ship will start in 2017 and take

three years to be completed for its maiden voyage, China Daily reported. "We are already in

negotiation with Italian shipbuilder Fincantieri SpA, which will provide technical support, and

if everything goes smoothly, design work on the ship will start soon, building will kick off in 2017,

and it will be delivered by 2020," said Chen Jun, vice president of Waigaoqiao Shipbuilding, which

is under China State Shipbuilding Corp. (CSSC). In October, CSSC, China Investment Corp. and

Carnival Corporation & Plc, the world's largest cruise operator, signed a 2.6 billion pound ($3.88

billion) agreement, which will enable the three companies to set up a joint-venture operation in

Hong Kong, and place orders with Waigaoqiao Shipbuilding. The unprecedented growth in

China's cruise industry is predicted to transform the country into the world's largest market.

"As many as 4.5 million Chinese passengers will go on cruise trips by 2020, and that figure will

soar to 17.5 million by 2030," Chen said. "It is estimated that there will be an annual demand for

five new cruise ships in the next 15 to 20 years in China alone." Maurizio Cergol, a cruise ship

designer from Fincantieri, said that out of the 1.4 million Asians who took a cruise last year,

700,000 of them were from the Chinese mainland. According to the report, Italy, Germany and

France have dominated the construction of the world's largest luxury cruise ships, with

around 200 large-sized vessels in operation across the globe. Industry figures, however, said

that although eight large cruise ships are being launched annually, the current demand is only 13

ships. The China Association of the National Shipbuilding Industry said that Chinese shipyards

have received orders for 20.38 million deadweight tonnage in the first 10 months of this year, a

decrease of 62.1 percent from the previous year. Chen said that domestic shipbuilders are

concerned about the declining orders and fierce competition and that the growing luxury cruise

ship market could boost the industry. "I am sure there are quite a few Chinese shipbuilders

interested in building cruise ships, but they have to think twice before making such a decision,

because the standards and requirements for building luxury vessels are very high," Chen said.

Fincantieri also cautioned shipbuilders that building a luxury vessel would require many

different technologies and skills. Yibada, 05-12-2015

10.Hundreds of thousands of Chinese shipyard workers face the axe

Reuters is reporting that China aims to lay off 5m to 6m state workers over the next two to

three years as part of efforts to curb industrial overcapacity and pollution. Coal and steel

industries are likely to lead the cutbacks, with other sectors where overcapacity is hurting including

cement, glassmaking and shipbuilding also facing significant change. The government has already

drawn up plans to cut as much as 150m tonnes of crude steel capacity and 500m tonnes of surplus

coal production in the next three to five years. On shipbuilding, which has seen massive

contraction in the last three years, the job losses could be in the hundreds of

thousands, Splash understands. Jin Peng, secretary general of the country’s national shipbuilding

association, said he does not know the scale of the potential redundancies in the sector. He did state

however: “Overcapacity is still one of the major problems in the shipbuilding industry, and the

industry is facing a major reshuffle and does need a restructuring.” Martin Rowe, a veteran broker

with Clarkson Platou in Hong Kong, commented: “Clearly as Chinese labour costs rise – especially

in coastal provinces where most of the big state yards are – and the country moves towards a more

services driven economy the raison d’etre for shipyards being a sink for labour falls away.”

Rowe suggested China would do well to examine how yards in Japan managed to survive in a


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previous scenario when a major economy transitioned “from metal bashing to widget

manufacturing and services”. Splash 24/7, 02-03-2016 Europe

11. Fincantieri inks several agreements with Iran

In the presence of the Prime Minister Matteo Renzi and the President of Iran Hassan Rouhani – on

an official visit in Italy – Fincantieri, one of the world’s most important shipbuilding groups, has

signed a number of framework agreements with some primary Iranian companies. These

preliminary understandings are prior to the accomplishment of several contracts worth some

hundred million euros and to the potential development of joint activities. In particular, Fincantieri

has reached a cooperation and development agreement with Azim Gostaresh Hormuz Shipbuilding

Industry (AGH), a modern and new shipyard, strategically located in the Persian Gulf within the

special economic zone. AGH is controlled by the larger Iran Shipbuilding and Offshore Industries

Complex Company (ISOICO), which is under the administration of the Industrial Development &

Renovation Organization of Iran (IDRO), one of Iran’s largest organization involved in the

country’s development and industrialization process. The agreement provides for cooperation

between the two companies for the construction of new merchant vessels and offshore units

both in the field of ship repairs and conversions and in refitting activities of already operating

units. Notably, the cooperation will affect the development of detailed engineering, optimization

of the construction processes, technical consultancy and assistance in all production phases and

personnel training both on site and in Italy. To this end, the two companies will shortly create

specific working groups engaged in activities to establish a synergic cooperation and to develop a

solid business partnership in the area. Moreover, Fincantieri, through its subsidiary Isotta Fraschini

Motori, has signed two further agreements concerning the marine propulsion sector and the one of

rail transports Asiasis, 29-01-2016

12. MSC Cruises Confirms Option for Two More Cruise Ships

Geneva and Naples-based cruise giant MSC Cruises has confirmed orders for two more cruise

vessels to be built by STX France’s shipyard in Saint Nazaire, according to the cruise company.

The announcement was made during the coin ceremony for the MSC Meraviglia, held at the

shipyard on Monday. The deal for the two Meraviglia Plus class vessels is worth a total of EUR

1.6 billion (USD 1.74 billion). The new vessels join the company’s existing order for two Vista

class cruise ships, previously signed with STX France in April 2015. The two Meraviglia Plus

class ships are expected to join the company’s fleet in October 2019 and September 2020. Featuring

a length of 331 meters, the new vessels will be able to carry almost 6,300 passengers. World Maritime News, 02-02-2016

13. Disney Cruise Line Orders Cruise Ship Pair from Meyer Werft

The Walt Disney Company, Disney Cruise Line has entered into a memorandum of agreement with

the Meyer Werft shipyard in Germany to build two additional cruise ships. Each new ship will be

approximately 135,000 gross tons – slightly larger than the newest Disney Cruise Line ships, the

Disney Dream and Disney Fantasy – and each is currently planned to include about 1,250 guest

staterooms. The schedule calls for the new ships to be completed in 2021 and 2023. The

company said that the plans for the expansion of Disney Cruise Line come during a period of

momentous growth and innovation for Disney properties around the globe. “The expansion of

Disney Cruise Line only adds to our excitement for the unprecedented growth taking place across

our vacation destinations, from new Star Wars experiences coming to the Walt Disney World and

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Disneyland resorts to the 25th anniversary of Disneyland Paris and the grand opening of our

newest park, Shanghai Disney Resort,” said Bob Chapek, Chairman, Walt Disney Parks and

Resorts. Disney Cruise Line said that further details on the fleet expansion and onboard offerings

will be announced at a later date. World Maritime News, 04-03-2016

14. Fincantieri bags record orders, posts 2015 loss

Fincantieri sank to a loss in 2015 but trumpeted a significant increase in its orderbook. The

company said its EUR 10.1bn in order intake was an all-time high as customers booked nine

cruiseships, 13 naval vessels and two tankers. That brought its orderbook to EUR 22.1bn at the

end of the year, compared to an orderbook of EUR 15 bn at the close of 2014. Fincantieri said it

expects to turn a profit in 2016, excluding one-time items, and grow revenue by 4% to 6%. TradeWinds, 31-3-2016

15. MSC Cruises Adding Four More Giants at STX France

Geneva-based cruise line MSC Cruises has signed a letter of intent for four more World Class

cruise ships to be built at STX France’s shipyard in Saint Nazaire, the cruise company

confirmed. Featuring a weight of 200,000 gross tons, the ships will be fueled by liquefied natural

gas (LNG) and have the capacity to carry some 5,400 passengers. The deal, which is reportedly

worth some EUR 4 billion (USD 4.5 billion), will see the ships debute in 2022. The four new

ships, announced by the cruise line’s founder Gianluigi Aponte, bring MSC Cruises’ orderbook to

11 new cruise vessels scheduled to join the company’s fleet by 2026. The order comes only two

months after the cruise company announced that it inked a deal with the same shipyard to build

two 331-meter long Meraviglia Plus class vessels, valued at EUR 1.6 billion (USD 1.74 billion).

The two Meraviglia Plus class ships, which will have the capacity to carry almost 6,300 passengers,

are expected to join the company’s fleet in October 2019 and September 2020.

Under a contract signed with STX France in April 2015, MSC Cruises has two additional Vista

class cruise ships on order.

World Maritime News, 6-4-2016

16. Superyachts Return Home for Upgrades

While the newbuilding market in superyacht construction was severely hit by the recession, the

refit activity stayed at a constant pace, and even experienced some growth. Several Dutch

superyacht builders successfully took on refit projects to weather the dry spell in newbuild

orders. The amount of new orders for superyachts has almost halved since the top year of 2008,

but with size increasing, the turnover has remained fairly constant. In the size bracket of 40 to 60

metres, not many newbuilds have been built, as there was an oversupply on the second-hand

market. This created an opportunity for refit shipyards, as there is rarely an owner who buys a pre-

owned superyacht without wishing to apply a personal touch to it after a season of sailing.

Maritime Holland spoke to two Dutch shipyards successfully claimed a portion of this

predominantly Mediterranean and North-American market. When Volharding Shipyards

moved its production to Turkey and China in 2008, it left one of the Netherlands’ largest covered

drydocks unused, in the seaport of Harlingen. The facilities were taken over by a new Dutch

superyacht builder called Icon Yachts, which started up production of a series of 60-metre

motoryachts in 2006. Based on a standard technical platform, including engine room and crew

quarters, owners were given free rein in interior and exterior design. Three of these vessels

were built, but when the slowdown in new orders came, Icon Yachts started to actively pursue refit

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and conversion projects. This was so successful that it has now become one of the core activities

of the yard.


Global

17. Coast Guard might seek icebreaker design from outside US The U.S. Coast Guard named a new offshore patrol cutter its top priority and said it might

look to heavy icebreaker designs from outside the U.S. when the agency’s commandant outlined

Fiscal Year 2017 budget requests before the House Appropriation Homeland Security

Subcommittee last week. Adm. Paul Zukunft faced questions on force-mix analysis, and whether

funding for other areas, specifically a 10th national security cutter, would endanger the offshore

patrol cutter program. “Our number one priority is the offshore patrol cutter, and I always look at

any new adds that might jeopardize that program of record.” The FY2016 budget request includes

$100 million for long-lead procurement for the offshore patrol cutter program. Icebreakers were

another hot topic, as the budget request also includes $150 million in long-lead funding to

accelerate the acquisition of a new heavy icebreaker, and Zukunft was questioned about how

soon the agency could begin acquiring a second or third icebreaker. “The shipbuilders of the United

States are convinced that they can build a heavy icebreaker here in the United States,” Zukunft

said. “To accelerate this timeline, we’re also looking at parent craft designs in other countries, but

that design would be built here in the United States to accelerate that timeline. What the $150

million does is it incentivizes industry.” Zukunft said that the Polar Star, the only U.S. heavy

icebreaker that is currently operational, has “maybe five to seven years of service life.” “We’re

doing everything we can to sustain it before its relief arrives,” Zukunft said. Workboat Magazine, 8-3-2016

18. UK North Sea to see 150 rigs scrapped in coming decade

Close to 150 oil platforms in the UK’s North Sea will be scrapped in the next 10 years,

according to new analysis from Douglas-Westwood. “The time for many North Sea offshore oil

and gas platforms to be decommissioned is fast approaching, with the oil price collapse bringing

the commerciality of numerous fields into question,” Douglas-Westwood stated. Another

consultancy, Wood Mackenzie, stated on Friday that, at recent prices, one in seven barrels of oil

being produced in UK waters is at a cash loss. Wood Mackenzie predicts that the annual

decommissioning spend will surpass oilfield development spending from 2019 onwards. Another

assessment of the North Sea, by Company Watch and commissioned by the Financial Times,

maintains 50% of oil and gas companies with North Sea operations are now loss-making, with total

losses for the past 12 months adding up to £6.4bn ($9.3bn). Splash 24/7, 08-02-2016

19. Newbuilding investments up by $8bn in 2015

Investments in container ship newbuildings nearly doubled last year with ordering at its

highest level for nearly a decade despite the depressed market. Even as freight rates slumped

to all-time lows on the major trades, the carrier orderbook totalled $19bn, up 72% on the $11bn

invested the previous year, according to Braemar ACM Shipbroking. The focus last year was once

again on ultra large containerships, with no fewer than 125 of the 260 ships ordered during the

12-month period having a capacity of more than 10,000 teu. “Perhaps in hindsight, this bullish

level of ordering ultra large vessels appeared reckless,” said Braemar. “Though during the first half

of 2015, the charter market appeared to be recovering nicely, demand reduced the idle fleet to

approximately 1.5% of the trading fleet. So ordering large ships at relatively attractive pricing did

not seem such a crazy idea. Despite a disappointing second half of the year, containership delivery


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slippage was still minimal in 2015 with Braemar estimating the number of orders deleted to be

below the 10% mark. Nevertheless, the broker expects this figure to be much higher in 2016 and

again in 2017, while it is also aware that some shipowners have pushed early 2016 deliveries back

until later this year. Lloyd’s List, 09-02-2016

20. Offshore drilling market to see the worst recession

Global offshore drilling rig and drillship markets are facing the worst recession in 30 years amid

the drop in oil prices. According to Clarksons Research, global offshore drilling rig utilization

was plunged to a 70% level at the end of 2015, down against that of 87% posted during the

same period a year ago. Particularly, utilization of floating drilling rigs recorded 77%, showing a

sharp downturn compared to 97% of 2013 and 91% of 2014. Also, it was reported that only 771

units of a total of 1,018 units are available while 560 units are just being operated currently. Charter

cost of floating drilling rigs and drillships is around $250,000 per day, down by 58% from $600,000

in 2014 when the rate reached a peak. Energy major companies including BP and so on have not

only quitted time charter contracts early but also terminated them which had been signed at a cost

of $550,000-$600,000 per day with offshore drilling companies. Asiasis, 15-02-2016

21. Bulkers Squeezed Out

The interest of the shipbuilding players and owners in building and ordering bulkers in 2016 has

subsided as shipyards believe they can earn more from constructing other types of ships as they are

more profitable, such as tankers for example. On the other hand, the best time to invest in modern

bulkers is now having in mind that they are available at lower prices- below those expected by

shipyards. The reason why the interest in bulkers is so low is the depressed bulker market on a

global scale, prompted by oversupply of vessels that have pushed the rates down. However, there

might be some light at the end of the tunnel as older tonnage is pushed out of the global fleet.

Clarksons Research’s data showed that the first three months of 2016 have been the busiest quarter

on record for bulk carrier demolition, with owners fighting to restore balance in supply-demand

capacity. In January 2016, BIMCO said that this year can be the busiest year with respect to

scrapping activity. Namely, around 40 million DWT is to be sold for demolition during

2016, BIMCO estimated.


POLICY

22. CORE LNGas project wins EU backing

The European Commission has selected the CORE LNGas project to promote LNG as fuel,

particularly for maritime transport of the Iberian Peninsula. EU selected the CORE LNGas hive

initiative among the projects submitted for the 2014 Connect Europe Facility (CEF)

Transport Calls for the development of the Trans-European Transport Networks. The project

will receive financial support of €16.5Mn from the European Commission. The total investment in

the project will amount to €33Mn, Spain’s Enagás said in a statement on Wednesday. The aim of

the project is to develop “a safe and efficient, integrated logistics and supply chain for LNG in

the transport industry, particularly for maritime transport of the Iberian Peninsula“. It

involves 20 studies, to be conducted by the partner companies for adaptation of infrastructure and

logistical – commercial development in order to offer small-scale supply services and bunkering.

In accordance with EU Directive 2014/94 on the deployment of alternative fuels infrastructure


PAGE 13 OF 54

(Clean Power for Transport), this project “will contribute to the decarbonisation of the

Mediterranean and Atlantic corridors,” Enagás said. With 8 regasification plants, the Iberian

Peninsula is “geostrategically positioned and possesses LNG logistics know-how key to the

development of the project and the consolidation of the region’s leadership in this field,” the

Spanish company added. LNG World News, 03-02-2016

23. EU backed LNG bunkering project starts second phase

The Poseidon Med II is the continuation of the Poseidon-Med project which together are a

part of a global initiative aiming to take all the necessary steps towards adoption of LNG as

marine fuel in East Mediterranean Sea. Total investment in the action is estimated at €53.2

million will see Greece becoming an “international marine bunkering and distribution hub for LNG

in South Eastern Europe,” according to the project’s website. Additional aims of the Poseidon Med

II are to facilitate the adoption of regulatory framework for the LNG bunkering as well as to

design the extension of the Greek Revithoussa LNG terminal. Project participants will also look

to design and construct an LNG fuelled specific feeder vessel, implement technical designs and

plan approvals for the retrofit or newbuild LNG fueled vessels and for additional ports’

infrastructure for bunkering operations. According to the European Parliament member, Mariya

Spyraki, retrofitting could cost up to €15 million. Also in the plan is to examine potential

synergies with other uses of liquefied natural gas, develop a sustainable LNG trading ad

pricing pattern and develop financial instruments to support the port and vessel installations.

The project will be co-funded by the European Union and coordinated by the Public Gas

Corporation of Greece. It is expected to be completed before the end of 2020. LNG World News, 18-02-2016

24. Air Quality a Top Priority for European Ports

The leading issue of European ports is still air quality which remains the number one

environmental priority of the ports, as it was in 2013, according to the European Sea Ports

Organization’s (ESPO) 2016 environmental review. “This is fully in line with the priority given to

the subject at EU political level. The implementation of the Sulphur Directive and the ongoing

political process on the air quality package have a clear role to play here,” ESPO said. Energy

consumption was placed as the second priority issue of European ports, as the importance of

energy consumption has raised year over year since 2009 due to “the direct link between energy

consumption, and the carbon footprint of the ports and climate change”. Noise appears in number

three and has remained a top priority issue since 2004. The relationship with the local community,

port development and water quality gained importance and moved to the fourth position, followed

by the two waste items, port waste and ship waste, on the fifth and sixth positions, respectively.

ESPO said that the climbing of water quality at number 8 can be linked with the

implementation of the water framework directive and the ongoing discussions on the

potential impact of washwater discharges by open loop scrubbers. Port development (land),

dredging operations, and dust, which were placed on the priority list of the European port sector

for the last 20 years, remain in the list in 2016 as well. “This data is important as it identifies the

high priority environmental issues on which ports are working and sets the framework for guidance

and initiatives to be taken by ESPO,” Antonis Michail, senior policy advisor and EcoPorts

coordinator at ESPO, said. ESPO and EcoPorts regularly monitor the top environmental priorities

of European ports authorities. The 2016 exercise builds on data from 91 ports in 20 EU member

states.



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25. Belgium Ratifies Ballast Water Management Convention

On March 7, Belgium became the latest country to ratify the Ballast Water Management

Convention. Aimed at preventing the spread of harmful and invasive aquatic species in ships'

ballast water, the Convention requires ships to have procedures in place for ballast water

management. The Convention will enter into force 12 months after ratification by 30 States,

representing 35 percent of world merchant shipping tonnage. With the accession by Belgium,

the number of States stands at 48, with an aggregate of 34.82 percent of the world’s merchant

fleet tonnage (based on global tonnage data as at end-February 2016). A small island State is

expected to deposit on March 8, bringing the number to 49. However, this won’t change the tonnage

due to zero tonnage registered in that State. Belgium also deposited its instrument of accession

to the Hong Kong Ship Recycling Convention, bringing the number of contracting States to

four. The Hong Kong Convention will enter into force 24 months after the date on which 15 States,

representing not less than 40 per cent of world merchant shipping by gross tonnage, become party

to the treaty. The combined maximum annual ship recycling volume of those States must, during

the preceding 10 years, constitute not less than three percent of their combined merchant shipping

tonnage. IMO Secretary-General Kitack Lim encouraged other States that had not already done so,

to ratify both treaties, in order to bring them into force. The Maritime Executive, 07-03-2016

26.Ratification Just Around the Corner

Ballast Water Management Convention needs just 0.18% more global tonnage

With March seeing Belgium confirming its commitment, all that is now needed is the signing by a

country (or countries) representing more than 0.18 per cent global merchant shipping tonnage.

Maritime Holland spoke to several key players from the ballast water industry about the

implications of playing the waiting game. Ratification of the BWMC will see a jump in the

number of vessels needing retrofit installation of ballast water treatment systems. In the

process of complying with the new regulations, ship owners and operators will have a wealth of

products to choose from, but the question remains – are the yards ready and do they have the

capacity to cope with the demand? “Yes, the yards are ready”, states Netherlands Maritime

Technology sector manager Sander den Heijer. “We estimate that it will take approximately two

days in dry dock to install all the equipment under the water line. The work can take place in parallel

with other operations so the amount of time spent in dry dock will be minimally affected. And the

vessel has to be in the dry dock anyway for its five-year survey so that means there will not be that

much pressure on the number of dry dock slots. Of course, it will take another couple of days to

perform the works above the water line. Project management will also be of utmost importance –

ship owners will need to inform the yards well in advance.” As to when the Convention will be

ratified, Den Heijer is as expectant as the rest of the maritime world. “At the moment we are all

waiting for it to happen”, he says. “Maybe some countries will announce it at the next Marine

Environment Protection Committee, but in the end nobody knows. Following ratification of the

BWMC, Alfa Laval is anticipating a flood in demand. The company is gearing up its resources to

meet the expected boost demand. “It’s one thing to buy equipment, but who’s going to engineer it

into the vessel? Serviceability is also important. Alfa Laval will be ready, not only with the

technical solutions, but also with an internal network of well-trained engineers and a strong external

network of engineering partners.” Part of the preparation includes organising training courses

that take in all technical aspects of the PureBallast design and installation. Following

ratification, Alfa Laval’s R&D will continue: “Vessels are changing so we need to stay up-to-date.

Not only with the Triple E ships though. We will also be specialising in small vessel solutions.”

Being able to offer the right ballast water treatment system for the job will also be a key issue


PAGE 15 OF 54

upon ratification, says Venteville managing director Michiel Veen who works closely with sister

company Radio Holland, both part of RH Marine Group, on ballast water (monitoring)

solutions. “We offer two systems, based on different technologies. The first is a chlorine-based

system from EVOQUA – this really is proven technology, having been used for decades in

antifouling systems for ship cooling systems. The second uses UV-C light methods: this comes

from UVspecialist BIO-SEA. The market shows us that the requirements for smaller capacity

systems – up to 1,000 cubic metres per hour – will be met by the UV techniques and chlorine-based

systems will match larger requirements. This is because chlorine systems will be more efficient

than UV systems over a certain capacity; the Capex/Opex discussion. Having both products in our

portfolio means we can cover the whole market. This way we always have the right solution for a

customer’s particular situation.” Retrofitting a vessel with ballast water treatment equipment is not

the only way ship owners can comply with future regulations. Mobile port-based systems can serve

as an alternative for ship owners who may not want to retrofit an onboard treatment system

says Gert-Jan Oude Egberink, Damen manager ballast water treatment. For such operators,

Damen’s InvaSave represents a potential solution. “Port-based ballast water treatment has

added value for ports clients as it increases the support services offered to customers, it will

prevent expensive delays in ports caused by failing onboard systems. Alternatives like

InvaSave are also required for ports that need to provide backup in the case of emergencies when

ships’ on board treatment systems fail.” The equipment is housed in a self-sufficient mobile

container, which can be put on board a service barge or moved around the port on a trailer or a

pontoon. Whilst in port, a vessel needing to discharge its ballast water can connect to the InvaSave

unit, which treats the water in compliance with IMO standards. For vessels with much larger ballast

water capacities, it is possible to interconnect several systems. While the bulk of this article has

covered the IMO Ballast Water Management Convention, there is another factor at play that will

also have considerable consequences on the international maritime market. This is the US Coast

Guard’s (USCG) own regulations concerning ballast water treatment. In the near future, a large

number of vessel owners and operators will find themselves having to comply with two sets

of standards. This, of course, will depend on an individual company’s operations. “If your

business is in Singapore and all you do is sail between Singapore and Australia, then the USCG

regulations will not affect you. IMO compliance will be enough”, Veen comments. “However,

many ship owners will have to comply with both IMO and USCG standards, which is causing a

bottleneck between the two. The question of US compliance is definitely a very important and

complex issue. The investments that a ship operator makes have an impact on the business all the

way to the resale value of that vessel. When you make an investment, you have to be sure it’s the

right one.”


27. South Korea Setting Up USD 1.2 bn Shipping Fund

The South Korean government is planning to set up a USD 1.2 billion ship investment fund to boost

its shipping industry, Yonhap news agency informed. The fund is expected to be led by local

commercial banks and state-run financial institutions including the Korea Development Bank,

Export-Import Bank of Korea and Korea Trade Insurance Corporation. The fund would receive

50 percent of the necessary finances in the form of senior bonds from commercial banks while

state-run financial institutions would chip in with 40 percent of the fund in the form of

subordinated bonds. The remaining 10 percent of the fund would be covered by shipping

companies. Under the plan, the Korea Trade Insurance Corp. and the Korea Maritime Guarantee

Insurance Co are expected to provide financial security to the companies wanting to either buy or


PAGE 16 OF 54

sell vessels thus mitigating the financial risks related to new investments in the sector. By

establishing the fund the country wants to bring more stability to the sector and facilitate ship

owners investment into new vessels. The decision comes on the back of a very challenging period

for the country’s shipping companies that have been struggling to keep their financial health despite

deteriorating market conditions. World Maritime News, 31-12-2015

28. Seoul in push to merge SHI with DSME

High-level government and financial figures in South Korea are pushing a plan that could

see two of the country’s top-tier shipyards merge. Talk has intensified that the government’s

Ministry of Industry, Trade and Energy wants to see Samsung Heavy Industry (SHI) take over

Korean Development Bank (KDB)-controlled DSME. The bank was forced to step in to rescue

the struggling yard with a massive $3.68bn bailout package at the end of last year. At the end of

March, the government went public on its ambitions when politician and former strategy and

finance minister Yoon Jeung-Hyun called for the country’s shipbuilding sector to be restructured

and the number of shipbuilding giants “cut down to one or two”. “Three is a crowd and two can

be companions”, one veteran face of Korean shipbuilding told TradeWinds. But observers point

out that SHI is also battling its own problems, the most acute of which centres on executing the

loss-making offshore contracts on its orderbook. Parent Samsung Group is understood to have

undertaken its own internal review of its shipbuilding interests in recent months. Shipbuilding is

not a core activity for the group, with SHI comprising just 3% of interests. This led to chatter that

the chaebol could look to get out of shipbuilding and shed SHI in the process. But the Lee family

(Samsung Group owner) is mindful it may need the government’s backing and financial support as

the second generation prepare their succession in the business. They suggest that this may lead

to Samsung getting tax reductions and KDB agreement to write down DSME outstanding

debt.

TradeWinds, 8-4-2016

29. Yard unions urge crisis countermeasures

Labor unions of Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries

showed position that Geoje, shipbuilding hub of Korea, must be picked as an employment

emergency area, with consideration of the long protracted recession in shipbuilding industry. The

two unions issued a joint statement on April 4, “Geoje is a shipbuilding specialized zone and most

citizens work in shipbuilding industry,” and insisted, “For this reason, the rise and fall of the

industry heavily affects local economy.” They continued, “Long-protracted shipbuilding

recession has already hard hit the economy in Geoje,” and added, “Many workers have been

laid off as mid and small sized subcontractor companies closed.” They showed concerns, “This

employment crisis is just the beginning. A full scale crisis is expected from June when 20,000

workers are expected to be fired.” From June, a number of offshore plants are scheduled for

delivery from the Big2 yards. The offshore sites have greatest number of workers in both shipyards

that thousands of workers face layoff if no more offshore projects are signed. They urged Geoje to

be picked as an employment emergency area. Once an area is declared an employment emergency

zone, firms within the area get government support including job-creation programs for up to one

year. The unions are planning to hold a press conference on April 7 at Geoje city hall. Asiasis, 6-4-2016

30. Korean yard workers urge for solution

Labor unions of Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries held

a press conference on April 7 at Geoje City Hall, South Gyeongsang Province of Korea. On the

day, the workers from Korea's two shipbuilding giants claimed, "It seems that Korean

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shipbuilding industry will face the wholesale discharge of workers and catastrophe of

unemployment from June when works start to decrease," and demanded to select Geoje City

as region of employment crisis and arrange measures to prevent the wholesale discharge. Both

Daewoo and Samsung are supposed to complete their offshore plant projects in June. If the two

shipbuilders fail to win additional order since then, it is expected that over 20,000 workers

lose their jobs, the union member explained. Accordingly, labor unions of Daewoo and Samsung

urged Geoje City and a provincial assembly to arrange measures to prevent the catastrophe of

unemployment. They also required the government to establish and enforce shipbuilding industry

development policy as soon as possible. Daewoo and Samsung are now building 18 and 24 offshore

plants, respectively. Within the first half of this year, Daewoo plans to deliver nine units and

Samsung, five units. Asiasis, 8-4-2016

31. Korean yards desperate for governmental support

Korean shipbuilding industry recorded new order intakes of below 200,000 cgt in the first

quarter of 2016, taking the fourth place in the world. It is the first time in 15 years that Korea

reached below 200,000 cgt in newbuilding orders. During the same period, China recorded the

highest order intakes in the world by winning newbuildings of a combined 1.14m cgt. Two Iran's

state-run companies Islamic Republic of Iran Shipping Lines (IRISL) and National Iranian Tanker

Company (NITC) are now negotiating with Korean and Chinese shipbuilders for construction of

containership, tanker and so on. Iranian shipowners are said to have demanded that Korean

shipyards arrange large ship financing because of their lack of cash holdings. For instance, the

owners are reportedly suggesting that they provide capital that accounts for 0~5% of the whole

shipbuilding price and Korean yards cover the rest. The problem is that situation has become

exceedingly difficult for Korean shipbuilders to raise funds after they made huge losses. Korea

is also an OECD-member country. When owner pays 20% of the whole shipbuilding price, under

OECD's related regulation, the Export-Import Bank of Korea (Korea Eximbank) can support ship

financing of up to the 80% price. In other words, Korean yards can not help but making a loan

at other financial routes to raise funds of 95~100% Iranian owners suggest. However, China

is not limited by such a regulation because the country is not an OECD-member country. The

Chinese government is capable of providing Iranian owners with ship financing as much as they

want. To make the matter worse, trading with dollar is still under the ban in Iran despite removal

of sanctions against the country. An official from Korea Eximbank noted, "What is somewhat

fortunate is that Iran tends to trust Korean ship rather than Chinese ship. The Korean government

is also trying to come up with various solutions such as spending yuan, receiving oil as ship

price in connection with shipowner-oil refinery company-shipbuilder." Asiasis, 8-4-2016

32. Ship Design Efficiency Standard Set to Low

Shipping’s only legally binding climate measure is not stimulating the uptake of new technologies

or driving efficiency improvements, according to a new independent study entitled Historical

Trends in Ship Design Efficiency made for Clean Shipping Coalition (CSC) by CE Delft, a research

and consultancy organization. As of 2013, new ships are required to have an energy efficiency

design index (EEDI) that meets or exceeds the target. However, the NGOs Seas at Risk (SAR) and

Transport & Environment (T&E), which are members of the coalition, finds that newbuilds have

performed much the same as those not covered. According to the study, at least two-thirds of

containerships, half of general cargo ships and a quarter of tankers launched in 2015 already

exceeded the limits for 2020 without using innovative new technologies. SAR and T&E say the


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ease with which ships over-comply exposes the weakness of the efficiency standard and the urgent

need for it to be strengthened. As a result, John Maggs, senior policy advisor at Seas At Risk as

well as Sotiris Raptis, shipping policy officer at T&E, are calling on tightening the standards of

ship design efficiency. “What is now clear is that recent improvements in ship design efficiency

are the result of the market, not the EEDI. If efficiency standards are not tightened there is a

real risk that a change in market circumstances will result in ship design efficiency falling back to

the level of the current weak standards,” Maggs said. The study also shows that, the current low

fuel prices and low freight rates provide a driver for a deterioration of the design efficiency of ships.

It is believed that if fuel prices continue to be low, ship-owners will have an incentive to opt for

less efficient ships if they are cheaper to build. However, EEDI can prevent this. As the stringency

of the EEDI increases, the impact on design efficiency is likely to become larger, says the study.

The Marine Environment Protection Committee (MEPC) of the International Maritime

Organization (IMO) is currently engaged in a review of the standard. One of the main questions

being addressed is whether the stringency of the regulation should be retained or amended. Another

issue is the effectiveness of existing EEDI targets in driving design efficiency improvements. The

IMO MEPC 69 Committee that meets in London from 18-22 April is to decide on a

recommendation from a sub-group reviewing the standard. World Maritime News, 5-4-2016

33. Marine litter partnership meets

The Steering Committee of the Global Partnership on Marine Litter has been meeting in London

(22-23 March) at IMO Headquarters to coordinate and plan future work to further reduce and

better manage marine litter. The global partnership gathers together international agencies,

Governments, NGOs, academia, private sector, civil society and individuals. IMO is a co-lead for

sea-based litter in the global partnership, contributing to the development of the first so-

called Massive Open Online Course on marine litter.

IMO, 23-3-2016

INNOVATION

34. World’s Fastest Ship Design Cuts Fuel Consumption by 74%

The 80-knot ship concept, introduced by Norway’s former Viking Ships, now InSvivia

Technologies, has been further developed now reaching 74% less fuel consumption, the

designer tells World Maritime News. In addition, the patent-pending technology has now been

approved as a Norwegian patent, and the company has applied for a PCT-investigation for further

international patent. Under the concept, a ship is powered by turbines that make a hundred times

gyro stabilization, and then, the ship, gaining on the torque force, is being propelled forward “as

cast in the sea”. In terms of design capacity, the ships in question would feature up to 16,500 in

TEU, 17 meters in maximum depth and up to 300 meters in length overall. However, the design is

also applicable to smaller ship designs. Under the previous design, the company claimed up to 37%

in fuel savings when compared to slow moving ships, based on results of CFD-analysis

(Computational Fluid Dynamics). The upgraded design has been further increased to achieve

74% less fuel consumption by replacing the four turbines with two larger turbines, and some

small optimization of the air cavitation. As explained by the designer, the larger turbines result

in greater depth, which is solved by a swath-down hull that lifts the ship to a reduced depth for

ports with low depth.

http://unep.org/gpa/gpml/gpml.asp

http://unep.org/gpa/gpml/MOOC.asp


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35. HANSEN develops feeder design series

The Danish naval architect company KNUD E. HANSEN announced on April 4 that it has recently

developed a number of pioneering container feeder vessel designs. Each of the designs presents

a series of innovations as part of a solution tailored to specific requirements. The first in the series

of three designs relates to a 2000 TEU vessel that was conceived of to specialize in calling at small,

narrow, up-river ports, for example the Port of Bangkok, Thailand. Navigating such harbours

requires a vessel to have a shallow draught – in the case of Bangkok, not more than 8.2 metres. To

fulfil this, the vessel requires a relatively small diameter propeller. To cater for this without a loss

of power, KNUD E. HANSEN’s designers presented a special propeller arrangement employing a

directly driven main propeller with a diameter of 5.8 m and a counter-rotating Azipod with

a 4.7 m propeller. A second design foresees a vessel which does not require such a shallow draught

and which will have a 3,800 TEU capacity. With draught not being a primary consideration, this

design sees the feeder vessel fitted out with a larger diameter, slower-turning propeller. Unlike

most feeder vessels, the deckhouse of this vessel is positioned slightly forward of amidships to

maximize the number of container slots on deck considering the IMO requirements to the

line of vision from the bridge. The added number of slots can be utilized in real-life loading

conditions because the vessel is wider and has a higher stability than most feeder vessels of this

size. Asiasis, 7-4-2016

36. Wartsila to design NB jack-up lift vessel

Wärtsilä stated on April 5 that it has been awarded the contract to provide the design for a new

jack-up lift vessel. The contract was signed in March with a well known Chinese yard and there is

an option for three more vessels. The Wärtsilä design is developed in collaboration with Altis, a

consultancy company specializing in the lift boat market. Wärtsilä Ship Design has considerable

experience in designing offshore and specialised vessels, and its selection for the design of a

new, next generation, lift vessel is considered an acknowledgement of the company’s strong

track record. This latest Wärtsilä design provides better performance compared to conventional

designs. In particular its crane capacity, MLC (Maritime Labour Convention) compliance,

accommodation, operational water depth, and DP2 (Dynamic Positioning) are all areas where

improvements have been made. “Wärtsilä was chosen to design this new series of vessels because

of our expertise, as well as our strong track record in the offshore market. Furthermore, our global

engineering and project development services mean that we can be a valuable local partner to both

the yard and the owner,” says Riku-Pekka Hägg, Vice President, Ship Design, Wärtsilä Marine

Solutions. The 70.5 metre long vessel can accommodate 250 people and will be capable of

operating in water depths of up to 75 metres. It is scheduled for delivery to the customer in

September, 2017. Asiasis, 7-4-2016

37. New LNG-Fuelled Concept Boxship Doesn’t Need an Engine Room

GTT, CMA CGM (and its subsidiary CMA Ships) and DNV GL released a technical and feasibility

study for a new mega box ship today – the Piston Engine Room Free Efficient Containership

PERFECt. The concept vessel is LNG-fuelled, powered by a combined gas and steam turbine,

and is electrically driven. Exploring this novel configuration resulted in the partners identifying

and analyzing a propulsion concept that has the potential to offer a more efficient, more flexible

and greener box ship design than current 20,000 TEU two-stroke diesel engine driven ultra large


PAGE 20 OF 54

container vessels. According to the study, an engine room is not needed any more. The three

electric main motors, which are arranged on one common shaft, can be run fully

independently of each other providing increased redundancy and reliability and a high level

of safety. The two 10,960 m³ LNG fuel tanks are located below the deck house, giving the vessel

enough fuel capacity for an Asia/Europe round trip. With gas turbine-driven power production that

utilizes a very clean fuel as well as electric propulsion, the ship’s machinery systems will be

simplified and much more robust. “The impulse behind this study was our interest in seeing how a

modern ultra large container ship design could benefit from utilizing COGAS, which is a system

for combined gas and steam turbine power generation,” adds Gerd Würsig, Business Director for

LNG-fuelled ships at DNV GL – Maritime. “A modern, land-based combined cycle LNG-fuelled

power plant will reach fuel-to-power efficiency ratios of up to 60 per cent, which is higher than

conventional diesel engines, which can achieve up to 52 per cent. In addition, the power density by

volume and weight is much higher for a COGAS system.”


38. DNV GL Adds Scrubber Ready Class Notation

Norwegian-based ship classification society DNV GL has developed a new class notation aimed

at helping shipowners to prepare newbuildings for the installation of a scrubber. As DNV GL

claims, Scrubber Ready standard ensures that the necessary preparations are in place for a

smooth and cost-efficient scrubber retrofit at a later stage. “There is no doubt that stricter

emissions regulations for sulphur oxides are here to stay,”said Knut Ørbeck-Nilssen, DNV GL

Maritime’s CEO. “This new Scrubber Ready class notation gives shipowners the flexibility

to minimize their initial investment when ordering a newbuilding, while at the same time having

the confidence that their vessels are already on the track to easy compliance with incoming

emissions regulations,” Ørbeck-Nilssen added. “It is very important to have an overview of the

design and an understanding of how the system will interact with the engines and auxiliary parts

of the machinery system. We also offer scrubber advisory services to support our customers, from

building the business case, to risk assessment of the design, installation, commissioning, hardware-

in-the-loop testing of the control system, right through to the system entering into

operation,” noted Hans Jacob Horgen, the company’s engineer for exhaust gas cleaning rules. This

notation can be awarded to ships that have planned and partly prepared for the installation

of an exhaust gas cleaning system (EGCS) for the later removal of SOx. As explained by DNV

GL, the standard ensures the general type and category of scrubber systems to be installed on

vessels. Due to the increasing importance of sustainable shipping, the IMO and the EU are

tightening their regulations for ships. With the SOx scrubbing, it is possible to meet new regulations

that place a cap on sulfur content of fuel oil at 0.1 percent, resulting in significantly reduced air

emissions. World Maritime News, 04-03-2016

39. 2016 to be pivotal for offshore wind sector

2015 was a record year for the offshore wind industry, doubling the capacity installed globally

in 2014. Douglas-Westwood (DW) forecasts fewer additions in 2016 relative to 2015, however,

the level of projects entering construction and the diversity of locations expected in 2016 bodes

well for a larger global market in the years to come. Capacity additions will grow significantly

post-2016, peaking at 9.2GW in 2022. Both the UK and Germany will install over 10 GW each

by 2025, resulting in a hive of offshore wind activity in North Sea. Other key future markets such

as France will begin construction on their first offshore farms. The DW report forecasts also

demand for vessels for offshore wind through 2025.


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40. The Netherlands: LNG-powered hopper barge launched

LNG-powered hopper barge named “greenports 1″ has recently been launched at Shipyard

Constructions Hoogezand Nieuwbouw (SCHN) in Foxhol, The Netherlands. The 70.5-meter long

barge will join the fleet of bremenports, the port managing company, during the second half of

2016, according to the company’s statement. The vessel, that bremenports says is presumably

the first LNG-powered working vessel at a European seaport, will be used to carry silt

dredged from the harbour basins in Bremerhaven, Germany to the disposal facility in Bremen-

Seehausen. Under the €4.9 million order, the vessel still has to have its engine installed. The gas-

diesel-electric propulsion system still has to be tested by Sandfirden, the engine supplier,

bremenports said. The vessel’s two tanks, each of which can hold six cubic metres of LNG, are

currently being manufactured in Asia and are scheduled for installation in June. Robert Howe,

Technical Managing Director of bremenports, added that soon after the installation the tanks will

be bunkered with LNG at the shipyard. He also noted that the vessel, once in operation, will be

bunkered at Bremen or Bremerhaven using the truck-to-ship bunkering method.

LNG World News, 6-4-2016

FUELS AND MATERIALS

41. Energy demand for commercial transportation to grow till 2040

Global energy demand for commercial transportation will continue to rise until 2040 as economies

grow, with aviation, marine and rail being the fastest-growing sub-sectors, ExxonMobil Corp

said in its long-term view of global energy. "Global energy demand for transportation is projected

to increase by about 30% from 2014 to 2040," the oil major said. This will also spur demand for

ships, planes and trains to carry supplies to factories and goods to markets. "In total, energy demand

from these three sub-sectors will likely grow by about 65%," ExxonMobil said in a report titled

The Outlook for Energy: A view to 2040. Currently, around 95% of transportation energy needs

are met by oil, so some of the demand will be capped by growing energy efficiency and other

alternatives. Natural gas, for instance, will grow from 2% of current transportation demand, to

about 5% in 2040, with the bulk of growth in heavy duty vehicles. "We also anticipate natural

gas demand in the marine sector to increase significantly, stimulated by new emission

standards," ExxonMobil said. It said that by 2040, gas is likely to account for about 10% of

total marine fuels, up from less than 1% now, with about two-thirds of the growth in developing

countries. The oil major said the world will also continue to enhance its ability to trade energy

among regions, with much of the growth related to the expanding global LNG network of

liquefaction plants, tankers and regasification terminals that can access global markets. Lloyd’s List, 26-01-2016

42. Demolition rates plunge to 2008 low

Gloomy sentiment continues to haunt the demolition market in the run-up to the Chinese New Year,

with no sign of recovery after several weeks of softening rates across the Indian subcontinent.

Demolition rates in the Indian subcontinent have dropped to $240 per ldt, a level last seen

during the 2008 financial crisis, at the beginning of January. The dire conditions in the shipping

market, which are now expected to stay for a long time, have resulted in the demolition market

being flooded with vintage vessels. Among all shipping segments, the dry bulk fleet saw the busiest

scrapping activities in the month. Out of the 60 vessels recycled reported by Clarksons, 41 vessels

are bulk carriers. This represents a 10% increase over the same period a year earlier. “Dry bulkers

is where most activity will remain hot for the majority of 2016. With freight rates reaching new

lows every day, it won’t be long before secondhand asset values will make the decision on the

http://www.lloydslist.com/ll/daily-briefing/?issueDate=2016-01-27&expandId=478134


PAGE 22 OF 54

owners' side ever more easy to make,” said Allied Shipping research. The increase in sale

candidates, particularly bulkers and containerships, heading for scrap in India, Pakistan and

Bangladesh has lowered the price for general cargo vessels to $250 per ldt and $280 per ldt for

tankers, according to GSM. Brokerage firm Clarksons said in its weekly report: “This week, supply

is once again outstripping demand. “With further disparity in pricing, the feeling is that this is one

of the most temperamental markets in recent memory, with cash buyers finding it difficult to find

interested end-recyclers.” Lloyd’s List, 27-01-2016

43. Layups slow to a trickle as freight rates and scrapping rise

More owners appear to be taking a ‘let’s continue trading and see where things go’ attitude while

anchorage authorities mull cutting fees to boost revenue. Improving freight rates and rising

demolition prices have dampened Greek owners’ enthusiasm to idle their ships, latest local

layup figures show. One of the major factors in the dramatic slowdown of layups is the rising price

of scrap ships, which encourages owners to shed tonnage by recycling than by idling. This should

please several industry watchers who have recently argued that demolition is the only way to

sustainably remove excess capacity from the market. According to figures from brokers Clarksons

and Seasure, scrapping of post-panamaxes and panamaxes has more than doubled so far this year

from the same period in 2015, both in terms of numbers (48 units) and in terms of tonnage (3.5

million DWT). Scrapped handysize tonnage rose by 40% to one million DWT up to 18 march. TradeWinds, 1-4-2016

44. Demolition prices up by $50 per ldt

Demolition activity remained resilient at the end of March with a recent spate of sales, some of

them at high prices compared with the previous week. The improved confidence was also

reciprocated by stronger resistance of shipowners to take up the lower prices that had been offered

a few weeks back. US-based cash buyer GMS reported upbeat sentiment and said that the prices

rose by $50 per ldt over March. Demolition prices have steadily increased over the week and

reached a recent high of $260 per ldt for bulkers and $285 per ldt for tankers. According to a

Singapore-based sales and purchase broker, the slowdown in funding by the European banks due

to new regulations on their capitalisation is to trigger more recycling deals. Clarkson’s data shows

12 vessels totalling 776,723 dwt sold for scrapping in the past seven days, of which eight vessels

were reported to be bulk carriers. Lloyd’s List, 29-3-2016

NAVAL

45. Saudi Arabia gives green light to the largest contract in the history of Navantia.

Only the signature is missing. Saudi Arabia has already given green light to Navantia to manu-

facture five corvettes for its Navy. Some sources budget this request in about 3,000 million

Euros, which guarantees a five-year workload in public plants. A contract to be distributed between

the shipyard of Ferrol and San Fernando in Cádiz. Although public company remains cautious and

insists that continues to work to assure the success of the assignment, sources that know the

operation claim that the country’s top officials – the equivalent of the Spanish Council of Ministers

– gave free rein to the operation several days ago, and that even the Saudi king gave his permission,


PAGE 23 OF 54

so far there is no written communication. And hence the caution.

They are only waiting for Navantia to receive the contract signed. The prices of oil, which

plummeted, striking in full the major exporting countries, among which is Saudi Arabia, is a weight

factor to the choice of the contract signing date. The order for the construction of five corvettes is

producing a tense wait in the regions, Ferrol and the island of San Fernando, who will benefit from

this business. About 2,000 people will work on the implementation of this work, both

belonging to direct staff and auxiliary companies. It will mean a change in the type Avante 2200

-of greater size- that has been exported prior to the Navy in Venezuela. The assignment will not

only involve the construction of five ships, but also its subsequent maintenance and the

training of crews and training in the handling of equipment. It will also include the construction

in Saudi Arabia of the base to where the corvettes will be assigned, as well as providing the systems.

The ships maintenance agreement will extend the relationship between Navantia and Saudi military

authorities to a much longer period. In addition, the assignment which will export greater amounts

of defense materials to the public shipyards, ahead of Venezuela and Australia, could open the door

to other works. In fact, the country had already begun several years ago a tender for the

purchase of frigates, which in addition to Navantia, French factories and the United States

were also competing. However, the negotiations long-term process for the purchase of military

vessels finally left this potential custom in the background when the country's authorities finally

picked for the corvettes. Besides, the Ferrol shipyard relies on achieving this year another contract

for export: the construction of two logistics ships for the Australian Navy. Navalia, 19-2-2016

46. Navantia given greater role in overhauling AWD programme Spanish shipbuilder Navantia has been given increased shipbuilding oversight and design

support responsibilities as part of ongoing efforts to recover the Royal Australian Navy's

(RAN's) much-delayed and over-budget Hobart-class Air Warfare Destroyer (AWD) programme.

The Australian government said on 8 December that Navantia, which designed the AWD platform,

will introduce a shipbuilding management team into Australian state-owned naval shipbuilder

ASC, which is leading the project to construct the vessels. Navantia will also place a design team

within ASC. The government said the appointment of Navantia, which was secured through a

limited tender process, is intended to "maximise programme performance through to the end of the

three ships' construction".

IHS Jane’s 360, 7-12-2015

47. Australia selects Navantia for new replenishment ship Spanish shipbuilder Navantia has been selected to construct two replenishment ships for the

Royal Australian Navy (RAN), Minister for Defence Marise Payne has confirmed. In comments

provided to IHS Jane's by her office on 11 March, Payne said Navantia has been chosen as the

preferred tenderer for the replenishment ship requirement, known as SEA 1654 Phase 3, and that

the company will now be invited to participate in the "Offer Definition and Improvement Activity

[ODIA] and negotiations". "The tender process is ongoing. Following the conduct of the ODIA and

negotiations, Defence will return to government for consideration of Second Pass approval, likely

in mid-2016," she said. According to the recently published Integrated Investment Program that

accompanied the defence white paper, the replenishment ship programme is valued at AUD1

billion to AUD2 billion, including operations and sustainment. Payne said local industry will


PAGE 24 OF 54

receive a portion of this funding for unspecified services. Payne said the two replenishment ships

are required by the RAN "as soon as possible", but that the "previous government was advised that

Australian shipyards do not have the capacity to complete the ships in the required time given the

size of the ship and the limitations of the shiplift and yard capacity at Osborne [facilities operated

by state-owned ASC in South Australia]." SEA 1654 Phase 3 seeks to replace the RAN supply

ships HMAS Success (OR 304) and HMAS Sirius (O 266) with off-the-shelf acquisitions. To meet

the requirement Navantia offered the RAN a design proposal based on the Spanish Navy's auxiliary

oiler replenishment ship SPS Cantabria , which entered service in 2011.

IHS Jane’s 360, 10-3-2016

48. Fincantieri starts LSS construction for Italian Navy Italian shipbuilder Fincantieri has begun parallel manufacturing activities for the Italian

Navy's new Logistics Support Ship (LSS) at its Riva Trigoso and Castellammare di Stabia

facilities. The first of nine major units being built by a Fincantieri-led industrial consortium under

the Legge Navale ('Naval Law') fleet recapitalisation programme for the navy, the 23,500-tonne

displacement LSS was contracted by the European defence procurement organisation

OCCAR in May 2015 on behalf of the Italian Ministry of Defence. Launch is scheduled for late

2017.

IHS Jane’s 360, 21-3-2016

49. France receives first B2M-class vessel France has received its first new multi-mission ship (Bâtiment Multi-mission - B2M) from

shipbuilder Kership, the French defence procurement agency (DGA) announced on 29 March.

d'Enrecastaux is the first of three B2M vessels ordered in later 2013 from Kership, a joint

venture between the Piriou shipyard and DCNS. The vessels are being constructed to support

sovereignty missions in the French overseas territories. They are designed to be able to conduct

maritime surveillance, force projection, logistics, counter-trafficking and humanitarian assistance

roles, among others. The 2,300 tonne B2M vessels have a crew of 20, can be armed with two

12.7x99 mm (.50 cal) machine guns, and have a maximum speed of 15 kt and an endurance of 30

days. The home port of d'Entrecastaux will be Noumea in French Caledonia. The second

ship, Bougainville , will be based in Papeete in French Polynesia with Champlain , the third vessel,

to be based in Port des Galets in Reunion Island. The French Navy plans to have them sailing at

least 200 days per year. As part of an update to France's military planning law a decision was

made in May 2015 to build a fourth B2M. The contract for its construction is expected to be signed

in 2017, with the ship destined to be based in Fort de France, Martinique.

IHS Jane’s 360, 29-3-2016

50. Brazil keeps combat ships programme afloat despite budget woes Despite budget difficulties, the Brazilian Navy is maintaining its plan to buy 11 surface combat

ships to modernise its fleet, a service spokesperson told IHS Jane's. The so-called PROSUPER

programme integrates the 'Construção do Núcleo do Poder Naval' strategic project and would buy

five 6,000-tonne escorts, five 1800-tonne offshore patrol vessels, and one 24,000-tonne logistics

support ship. Navantia, BAE Systems, Fincantieri, ThyssenKrupp Marine Systems, DCNS,

Daewoo Shipbuilding and Marine Engineering, and Damen Schelde Naval Shipbuilding have

submitted design proposals. Chinese and US shipbuilders have also joined the competition.


PAGE 25 OF 54

However, due to budget constraints, no decisions associated to PROSUPER are to be made in

2016, the navy's spokesperson told IHS Jane's.

IHS Jane’s 360, 30-3-2016

51. China confirms build of second carrier China's Ministry for National Defense confirmed on 31 December 2015 that the country's

second aircraft carrier - its first indigenous carrier - is under construction at the Dalian

shipyard. According to media reports, the defence ministry said that a 50,000-tonne,

conventionally powered ship is in build. However, no details appear to have been provided on how

build work is progressing. As noted by the BBC, defence ministry spokesman Senior Colonel Yang

Yujun told a media briefing that the carrier "is being developed according to entirely domestic

designs". The spokesman added that experience from bringing into service and operating China's

first carrier, the Project 1143.5/6 ship Liaoning , had provided guidance on design and construction

and ideas for improvements and enhancements - although, reported the BBC, no further details

were provided.

IHS Jane’s 360, 4-1-2016

52. Call for Proposals: Pilot project on defence research

A call for proposals for the Pilot Project for defence research has been published in the

Official Journal and on the EDA website. The objective of the call is to award grant agreements

for the value of almost €1.4 million for two technological development projects in the area of

defence and one research and development project linked to certification for military and

civil uses. This is the first time that defence research will be funded through the EU budget

following a Delegation Agreement signed by the EDA and the European Commission in November

2015. In particular, the present call looks for proposals that: foster research cooperation

between defence research actors in European Union Member States, strengthen the defence

industry’s competitiveness and raises the level of defence technological and industrial

capacity for the armed forces. Research in defence related technologies is a critical area for the

development of the European Defence Technological and Industrial Base and the strength and

strategic autonomy of the EU Member States armed forces. The Pilot Project, has been introduced

by the European Parliament in the EU budget (2015 and 2016), with the aim to test the conditions

for defence research in the EU framework and pave the way for the planned Preparatory Action on

defence research. The European Commission, in agreement with the European Council, will launch

a Preparatory Action on defence research, as foreseen in the Commission’s 2013 Communication

on the defence and security sector and the 2014 implementation roadmap, which will start in 2017

and last for three years, in order to test and prepare the ground for a possible defence research

programme in the next Multiannual Financial Framework. The Pilot Project has been entrusted to

EDA by the European Commission through a Delegation Agreement which was signed on 16

November. As a result, EDA is responsible for the execution and management of the projects. The

call for proposals, the submission of proposals, the evaluation and the awarding of the grant

agreement will be organised and coordinated by EDA. Interested parties are invited to respond to

the call for proposals before 20 May 2016. The call and associated documentation are available at

this link (http://bit.ly/1Y3KU8O).

EDA, 23-3-2016

http://bit.ly/1Y3KU8O


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SEA EUROPE NEWS

53. Mr. Christophe Tytgat Appointed New Secretary General of SEA Europe

On behalf of SEA Europe, its Chairman, Kjeld Dittmann, is delighted to announce the decision by

the SEA Europe Board to appoint Christophe Tytgat as the organisation’s new Secretary General.

He will take up his new position as from 1 March 2016. Mr. Tytgat holds degrees in Law,

International Relations and East-European Studies from the University of Leuven as well as a

degree in International and European Law from the University of Brussels. He started his career in

1999 as a civil servant in the Belgian federal administration. First, he worked as adviser for the

Ministry of Foreign Affairs, and then, he was legal advisor for the Ministry of Transport and

Infrastructure (Maritime Department). Since June 2001, Mr. Tytgat has worked for the European

Community Shipowners’ Associations (ECSA), and for the past three years, he has been ECSA’s

Senior Director responsible for competition, legal and taxation matters, as well as social affairs. He

represented ECSA on issues within these fields towards EU Institutions and stakeholders. Mr.

Tytgat has also been an active member in the Sectoral Social Dialogue Committee for Maritime

Transport. Upon the announcement in SEA Europe Mr. Tytgat said: “I am very grateful to SEA

Europe for giving me the opportunity to lead the organisation through the current challenging times

for the shipbuilding and marine equipment industry. I am conscious that this task will not be easy,

but I look forward to this new challenge.” Christophe Tytgat will replace Douwe Cunningham,

who became the association’s Secretary General in 2012. Kjeld Dittmann, Chairman of SEA

Europe, paid tribute to Mr. Cunningham’s tenure as the organisation’s first Secretary General:

“Douwe’s dedication and leadership has helped SEA Europe grow considerably from a newly

created entity in 2012, based on the long standing work of CESA (Community of European

Shipyards’ Associations) and EMEC (European Marine Equipment Council), to a leading

association for the European maritime technology industry. Douwe has made countless

contributions to SEA Europe’s success, and the industry will benefit from the solid foundations

which have been laid, and I wish him all the very best of luck with his further career”.

SEA Europe, 14-1-2016

54. Upgrading Skills: Maritime Technology Sector to Set Up a European Skills Council

On the 1st of March 2016, the SEARICA Intergroup – representedby MEPs Gesine Meissner,

Sergio Cofferati and Dariusz Rosati – hosted an event in the European Parliament entitled “skills

for the future maritime technology”. The event was attended by representatives from the European

maritime technology sector, including CEOs, HR directors, representatives from trade unions,

maritime education and training providers, regional authorities, representatives from the European

Commission and Members of the European Parliament. The European maritime technology sector

is innovation-driven industry that encompasses both enterprises involved in the design,

construction, maintenance and repair of the most complex and technologically advanced ships, and

marine equipment. The sector employs over 900,000 people directly and indirectly and generates

an annual turnover of € 91 billion. For Europe, it is one of the sectors with the highest investment

intensity in Research, Development and Innovation (RDI) activities. “The maritime technology

industry is an important sector for the industrial modernization of Europe and for achieving the

goals of the Europe 2020-Strategy” said Ms Lowri Evans, Director-General for Internal Market,

Industry, Entrepreneurship and SMEs. “This industry is strategic for the EU and its full potential


PAGE 27 OF 54

needs to be “exploited” to maximize the contribution of the sector for Europe´s Blue Growth”.

Over the last decade, the European maritime technology sector evolved towards the building and

repairing of the most complex and technologically advanced ships, as well as the design of

sophisticated technologies and equipment. These complexities require expertise and know-how

that today can only be found in Europe. Given the importance of the sector, it is of utmost

importance for Europe to retain its competence and skilled people so as to remain competitive

versus its global competitors. Aware of the challenges and risks for the future of the sector and

Europe’s growth, and mindful of the recommendations of the LeaderSHIP 2020 sectoral strategy

which was adopted by the European Commission and industry stakeholders in February 2013 and

endorsed by the European Competitiveness Council in May 2013, the social partners for the

Maritime Technology Sector – IndustriAll Europe and Sea Europe - embarked in the creation of a

European Skills Council for the sector. The Skills Council will help the Maritime Technology

Sector in anticipating the needs for skills more effectively supporting the facilitation of future skills,

training and mobility.

SEA Europe and IndustriAll, 1-3-2016

55. SEA Europe looks for Business Opprtunities in the US

From 6 till 12 February, SEA Europe visited Washington DC to seek support for an ambitious

maritime manufacturing chapter in the Transatlantic Trade and Investment Partnership (TTIP). The

purpose of the visit was threefold: first, to present the European shipbuilding industry to US

stakeholders; secondly, to gain a better understanding of existing US maritime restrictions; and

third, to look for market opportunities which can create growth and jobs for both sides of the

Atlantic. Under current US legislations, it is very difficult for European shipyards to operate on the

US domestic market as the result of protectionist measures. A well-known example of such a trade

barrier is the US Jones Act. Under this Act, which dates from the 1920s, all commercial vessels

transporting cargo between ports and points located in the United States and on the outer

continental shelf need to fly a US flag, be owned and manned by US citizens and to be built in US

shipyards. This law makes it very difficult – if not impossible – for European shipbuilders to build

and repair ships destined for the US domestic shipping market. SEA Europe is only concerned

about the US build requirement under those restrictive legislations. The consequences of such

restriction are not only felt by European businesses, but also by the Americans themselves. Today,

US commercial shipbuilding has almost disappeared as a direct result of lack of competition. Cargo

transport is mainly done over land, primarily by trucks, which results in highly congested US roads

with an adverse effect for the environment. SEA Europe firmly believes that a relaxation of US

maritime restrictions – will create extra business and employment opportunities for both the

European and American shipbuilding industry. The US will also gain better access to European

advanced marine technology and equipment, to modern and sustainable vessels and infrastructure

and to specialised know-how. Ultimately, an increase of US domestic transport by sea will also

improve road safety and the US environment. SEA Europe regards the current TTIP negotiations

as a unique opportunity and political momentum to discuss and seek a relaxation of the current

trade barriers. Hans Voorneveld, SEA Delegation leader said: “We hope that the US TTIP

negotiators will seriously consider our views and demands for improved US market access that

benefit both sides of the Atlantic Ocean. We are very happy to have full support of our European

Commissioners for Trade and Transport to defend our case within the TTIP”.

SEA Europe, 18-3-2016


PAGE 28 OF 54

SHIPBUILDING STATISTICS Figure 1 – Summary of activity in World Shipyards

Data source: IHS Fairplay The global orderbook continues its increasing trend started in 2013. Oversupply is affecting the cargo

carriers market. In 2013 and 2014 new orders for cargo carriers increased with the aim of replacing idle

older fleet by more efficient ships. The decrease on shipping costs due to the low oil prices doesn’t

incentive owners to invest on fuel efficient vessels, and this linked to the cancellation and postponement

of offshore projects has led to a drop of new orders in 2015. Deliveries slightly increased compared to

last year.

Data source: IHS Fairplay


PAGE 29 OF 54

Figure 2 – Summary of activity in Chinese shipyards


Chinese shipyards saw their new orders decrease around 25% compared to 2014. due toa fall in new

orders in the bulker and offshore markets). Deliveries were slightly higher than new orders leading to a

decrease in the orderbook after growing for three years in a row.



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Figure 3 – Summary of activity in South Korean shipyards


South Korean shipyards are experiencing tough times.Low oil prices are hitting hard the offshore

newbuilding market, leading to postponement and cancellation of orders making Korean shipyards report

a loss of almost $7 bn in 2015. New orders in 2015 decreased 20% compared to the year before. Deliveries

are about the same level since 2013.



PAGE 31 OF 54

Figure 4 – Summary of activity of Japanese shipyards

Data source IHS Fairplay

Japanese orderbook has experienced a sharp growth since its government decided to devaluate the Yen

back in 2013. This governmental policy put Japanese Yen in a more competitive position in the export

market and the shipbuilding industry has benefited increasing the new contracts for foreign owners.

Japanese owners are among the few increasing investments in newbuilding during2015 ,most of these

orders going to Japanese shipyards further improving the new order intake for national shipbuilders.

Deliveries remained stable at 2014 levels...

Data source IHS Fairplay


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Figure 5 – Summary of activity of EU28+ Norway shipyards

Data source: IHS Fairplay European orderbook continues growing since 2012. In 2015 202 vessels were contracted accounting 3.2

M CGT. New orders remained stable at 2014 levels in Europe while deliveries were slightly lower than

in2014. Over the last years, the level of deliveries has decreased y-o-y due to an increased complexity of

the vessels built, with a high value. 62% of CGTs in the European orderbook are passenger ships, followed

by offshore vessels and ONCCVThe growth in the demand of passenger ships and ONCCV is contrasting

with the tough situation that some European companies are experiencing due to the decline in the demand

of offshore vessels and equipment.



PAGE 33 OF 54

Figure 6 – New Orders by Area and Ship Type


Global new orders shrunk 23% compared to the year before. China remains the main contractor with 712

vessels accounting 33.3M CGT, South Korea and Japan followed with about 26M CGT each. However,

Japan with 513 orders and South Korea 276. This shows that the type of vessels built by Korean yards are

much more complex than the Japanese built ones. EU28+Norway remained more or less stable at 2014

levels with 3.3M CGT. New orders for bulkers decreased largely in 2015 (-60%) due to the overcapacity

in the bulk shipping market and the very low freight rates. Demand for tankers (+50%) and containerships

(+80%) are sustaining new orders.



PAGE 34 OF 54

Figure 7 – China 2015 New Orders by Vessel Type


Chinese shipyards received orders for 712 vessels, accounting 13M CGT. 80% of their new orders are

cargo carriers. New orders for bulkers decreased compared to the year before, tankers and

containerships being the most demanded ship type.

Figure 8 – South Korea 2015 New Orders by Vessel Type

Data source: IHS Fairplay South Korean yards, world leaders in building offshore vessels have seen the orders for these vessels

almost disappear in 2015. 50% of the new orders correspond to oil tankers, followed by containerships

and LNG/LPG carriers.


PAGE 35 OF 54

Figure 9 – Japan 2015 New Orders by Vessel Type


Bulkers are still the majority of new orders in Japan despite the crisis of the segment., Japanese design of

so-called eco-bulkers and the competitive position of the Yen bring orders for new bulkers to Japanese

shipyards. Tankers constitute almost 30% of the new orders followed by other cargo vessels.

Figure 10 – EU28+Norway 2015 New Orders by Vessel Type


European shipyards are specialised in building non-cargo carrying high technology vessels. Especially

passenger ships such as cruise or ferry vessels account for 64% of new orders at the same level as in 2014,


PAGE 36 OF 54

Figure 11 – Completions by Main Shipbuilding Areas and Ship Types


Global deliveries slightly increased to 2013 levels.China led the deliveries with 941 vessels totalling 13.3M

CGT, followed by South Korean shipyards with 360 completions accounting 11.7M CGT. Japan followed

with 520 vessels and 6.8 M CGT. European shipyards delivered 199 vessels and a total of 1.7 M CGT in

2015, slightly lower level compared to 2014. Bulkers were 31% of the completions in CGT terms

leading the growth on deliveries compared to 2014. Delivery of gas tankers also increased by 21%, while

offshore deliveries decreased 20% compared to 2014.



PAGE 37 OF 54

Figure 12 – World Orderbook by Area


The world orderbook continues growing, standing at 109.7M CGT. In CGT terms China leads the

orderbook (40M CGT) followed by Korea (29M CGT), Japan (21M CGT) and EU 28+Norway (8.7M CGT).

Bulk carriers still lead the orderbook in CGT terms (23%), but tankers are a close second with 20% of the

total. The orderbook in 2015 was much diversified and we saw an increase of passenger ships: from less

than 5M CGT in 2014 to 6.3M CGT.



PAGE 38 OF 54

Figure 13 – Value of deliveries by main Shipbuilding Areas

Only EU28 + Norway and Japan have a higher new orders value than deliveries, respectively $11 and $12.9

billion. China and South Korea are leading in deliveries value, but the much lower new orders value will

hurt their shipyards further. In 2014 South Korea had 48% of the global value of new orders, while in 2015

had just 32%, Japan (2014 16% - 2015 19%), China (2014 19% - 2015 27%) and EU28+Norway (2014 10%

- 2015 16%) are all increasing their market shares. The market shares for completions are more or less

stable at 2014 levels.

Figure 14 – Value of the New Orders by main Shipbuilding Areas

Data Source: Clarkson

EU 28 + Nw


PAGE 39 OF 54

Figure 15 – Value of Orderbook by main Shipbuilding Areas

Data Source: Clarkson & AMI

Looking at the commercial orderbook value, it is led by South Korea with $91.2 bn. China follows with

$80.5 bn. Europe ranks 3rd with $43.6 bn and Japan 4th as its commercial orderbook stands at $39.7 bn.

However, Europe is the leader in the Naval export market, and If we consider naval shipbuilding as well,

Europe stands among the market leader with a total value of $118.8 billion.

Figure 16 - Evolution of Global Investment in Newbuilding Activity:

Data source: Clarkson

Global investment in commercial newbuilding has decreased y-o-y since 2013, standing at the lowest level

since 2010.2015 has seen a further decrease in the investment for offshore vessels, reaching the lowest

level since 2004. Cruise vessels remained stable as well as ferries. However, total investment is showing a

steep decline since 2013 when it was at $126 billion compared to 2015 $69 billion. The investment for

cargo carriers was 67% of the total in 2015, with tankers at 26% and containers at 25%. Offshore and

cruise vessels were respectively 10% of total investment.


PAGE 40 OF 54

Figure 17 – Investment by Owners and Builders Area

Data source: IHS Fairplay This chart shows the nationality of owners and builders: Chinese owners mostly bought vessels built in

China, the same is true for South Korea and Japan buying mainly from their country based shipyards. The

trend is the opposite for Europe , USA and Singapore where owners tend to build ships abroad. Especially

European owners, the largest investors in 2015, buy mostly from China and South Korea.

Figure 18 – Orderbook and Investment by Shipowner Nationality


Roughly 30% of the global orderbook in CGT terms was ordered by European shipowners. European

shipowners are controlling 40% of the world fleet by gross tonnage and are still the major investors in the

newbuilding sector.


PAGE 41 OF 54

Figure 19 – Orderbook by Shipowner Nationality and Shipbuilding Country


Except for European and USA owners most of the orderbook relies on shipyards based in the same country

as owners. Chinese owners order more than 90% of their newbuildings at Chinese shipyards, the same

goes for Japan and South Korea. The figure is not changing much yoy except for the shrinking orderbook

of European owners compared to the others in RoW.



PAGE 42 OF 54

Figure 20 – European Owners’ Orderbook by Vessel Type and Shipbuilding Area


European owners are ordering most of their cargo carrying fleet in Asian shipyards, with the

exception of few small ones which are built in European shipyards. On the other hand, for complex

high technology vessels such as cruise ships ferries, fishing vessels, tugs and dredgers orders are

placed on European shipyards. In the case of offshore vessels the picture is mixed, with orders

placed in all main shipbuilding countries.



PAGE 43 OF 54

Figure 21 – SMRC Turnover from 2006 to 2015

Data source: SEA Europe

European ship maintenance, repair and conversion sector grew for the fourth year on a row. In

2015 the turnover grew to €3.7bn.

Figure 22 – Monthly Newbuilding Price Index

Data Source: Clarkson

Clarkson’s ship prices index shows the rapid improvement of Japanese prices since 2013. The Japanese

Yen stands as the most competitive currency in the export market thanks to the government’s decision

to depreciate it. Despite slight improvement of the Euro compared to January 2014, it is still at low levels.

Even slight improvement on the newbuilding prices, they remain at low levels and several shipyards are

still facing a complicated situation of low pricing to compete for low incomes.


PAGE 44 OF 54

Figure 23 – Bunker Fuel and crude Oil prices Long Term

Data source: BunkerWorld.com and World Bank

Oil price has kept decreasing during all 2015 and it is now below 2009 bottom levels. Bunker fuel is now

so cheap that is less expensive than LNG, but since many contracts have a lag variable, it is likely that in

the next few months its price will keep falling. As a proof you can see the lag in price in 2009: LNG followed

the crash only a few months after crude oil.

Figure 24 – Bunker Prices Short Term

Data source: BunkerWorld.com and World Bank

However, LNG is still less expensive than MGO remaining a good option for bunkering in Emissions

Controlled Areas even in the short term. LNG bunkering stations are becoming more and more common

in Europe (News #23) making LNG a viable alternative for short and long trips.


PAGE 45 OF 54

Figure 25 – Ship Scrapping

Data source: Clarksons In 2015 bulkers were the most scrapped vessels, but as we saw earlier this hasn’t led to new orders for

that segment. This could be the reflection of a long-term shift in the market: ever-larger ships are going to

fulfil the demand for bulk cargo which is decreasing anyway because of the recent economic downturn in

China leading to a decreasing demand for materials and commodities.

Figure 26 – Materials Price

Data source: MEPS.co.uk

Hot Rolled Plate price is decreasing further and is now below 2005 levels. EU and Asian prices are

converging at around 400$/ton. Steel is following the same trend as all other commodities and bulk

materials we saw through all the report.


PAGE 46 OF 54

ANNEX TABLES - SUMMARY OF SHIP BUILDING ACTIVITY* Source: IHS Fairplay

Table 1 –Orderbook by Ship Types - 31.12.2015

TYPES NO. 1.000 GT % 1.000 CGT % 1.000 DWT %

Crude Oil Tanker 437 40.523 20,0 13.872 12,6 76.219 27,7

Oil Products Tanker 193 3.199 1,6 2.009 1,8 5.200 1,9

Chemical Tanker 497 9.922 4,9 6.888 6,3 16.020 5,8

Other Liquids 6 4 0,0 11 0,0 3 0,0

A Tankers 1.133 53.648 26,5 22.780 20,8 97.442 35,5

Bulk Dry 1.299 59.938 29,6 25.430 23,2 108.904 39,6

Bulk Dry / Oil 4 174 0,1 99 0,1 322 0,1

Self-Discharging Bulk Dry 8 207 0,1 112 0,1 314 0,1

Other Bulk Dry 20 185 0,1 133 0,1 239 0,1

B Bulk Carriers 1.331 60.504 29,9 25.774 23,5 109.779 40,0

General Cargo 349 2.988 1,5 2.745 2,5 4.288 1,6

Container 497 39.521 19,5 18.569 16,9 41.942 15,3

Refrigerated Cargo 15 135 0,1 193 0,2 132 0,0

Ro-Ro Cargo 134 5.858 2,9 3.267 3,0 1.912 0,7

Other Dry Cargo 22 669 0,3 422 0,4 684 0,2

C Dry Cargoes 1.017 49.171 24,3 25.196 23,0 48.958 17,8

LNG Tanker 143 15.696 7,8 12.059 11,0 11.126 4,0

LPG Tanker 212 6.115 3,0 4.330 3,9 6.884 2,5

D Gastankers 355 21.811 10,8 16.389 14,9 18.010 6,6

Passenger/Ro-Ro Cargo 80 588 0,3 785 0,7 130 0,0

Passenger (Cruise) 52 5.344 2,6 5.389 4,9 413 0,2

Other Passenger Vessels/Ferries 49 75 0,0 130 0,1 27 0,0

E Ferries / Passenger Ships 181 6.007 3,0 6.304 5,7 570 0,2

Fish Catching 91 142 0,1 365 0,3 0 0,0

Other Fishing 34 64 0,0 162 0,1 0 0,0

Offshore Supply 710 1.841 0,9 3.995 3,6 0 0,0

Other Offshore 306 7.931 3,9 6.162 5,6 0 0,0

Research 36 176 0,1 286 0,3 0 0,0

Towing / Pushing 600 251 0,1 1.102 1,0 0 0,0

Dredging 29 194 0,1 285 0,3 0 0,0

Other Activities 216 523 0,3 889 0,8 0 0,0

F Other Non Cargo Vessels 2.022 11.122 5,5 13.246 12,1 0 0,0

TOTAL 6.039 202.265 100,0 109.690 100,0 274.758 100,0

ORDERBOOK AS PER END OF DECEMBER 2015 BY SHIPTYPES


PAGE 47 OF 54

Table 2 – Orderbook by Country - 31.12.2015

COUNTRY NO. 1.000 GT % 1.000 CGT %

BELGIUM 0 0 0,0 0 0,0

BULGARIA* 2 5 0,0 12 0,0

CROATIA* 38 717 0,4 526 0,5

CZECH REPUBLIC 3 8 0,0 12 0,0

DENMARK* 6 10 0,0 25 0,0

ESTONIA 2 1 0,0 3 0,0

FINLAND* 12 879 0,4 889 0,8

FRANCE* 6 730 0,4 659 0,6

GERMANY* 28 1.860 0,9 1.766 1,6

GREECE* 3 2 0,0 7 0,0

IRELAND 1 0 0,0 1 0,0

ITALY* 37 1985 1,0 2158 2,0

LATVIA 3 1 0,0 5 0,0

LITHUANIA* 0 0 0,0 0 0,0

NETHERLANDS* 75 247 0,1 383 0,3

POLAND* 75 187 0,1 348 0,3

PORTUGAL* 0 0 0,0 0 0,0

ROMANIA* 83 1923 1,0 1080 1,0

SLOVAKIA 0 0 0,0 0 0,0

SLOVENIA 0 0 0,0 0 0,0

SPAIN* 52 718 0,4 521 0,5

SWEDEN 0 0 0,0 0 0,0

UNITED KINGDOM* 15 32 0,0 64 0,1

A EU-28 441 9.305 4,6 8.459 7,7

ALBANIA 0 0 0,0 0 0,0

NORWAY* 34 160 0,1 256 0,2

RUSSIA 49 319 0,2 373 0,3

SERBIA/MONTENEGRO 1 0 0,0 1 0,0

TURKEY* 141 368 0,2 621 0,6

UKRAINE 13 39 0,0 68 0,1

B OTHER EUROPEAN 238 886 0,4 1.319 1,2

EU-28 + NORWAY 475 9.465 4,7 8.715 7,9

SEA EUROPE* MEMBERS 466 9.823 4,9 9.315 8,5

JAPAN 991 40.585 20,1 20.855 19,0

KOREA (SOUTH) 774 59.974 29,7 29.257 26,7

CHINA 2.354 77.855 38,5 39.925 36,4

BRAZIL 128 3.111 1,5 2.184 2,0

INDIA 120 292 0,1 502 0,5

INDONESIA 110 181 0,1 321 0,3

MALAYSIA 129 106 0,1 315 0,3

PHILIPPINES 93 5.170 2,6 2.347 2,1

SINGAPORE 56 192 0,1 281 0,3

TAIWAN 33 1.444 0,7 796 0,7

United States of America 111 845 0,4 856 0,8

VIETNAM 206 1.606 0,8 1.300 1,2

OTHERS 255 711 0,4 973 0,9

F REST OF WORLD 1.241 13.658 6,8 9.875 9,0

WORLD TOTAL 6.039 202.265 100,0 109.690 100,0

ORDERBOOK AS PER END OF DECEMBER 2015 BY COUNTRIES


PAGE 48 OF 54

Table 3 – New Orders by Shiptypes 2015


Crude Oil Tanker 225 21.346 27,9 7.258 18,4 40.230 38,7

Oil Products Tanker 71 1.508 2,0 878 2,2 2.466 2,4

Chemical Tanker 200 4.040 5,3 2.784 7,1 6.619 6,4

Other Liquids 1 0 0,0 1 0,0 0 0,0

A Tankers 497 26.894 35,1 10.921 27,8 49.315 47,4

Bulk Dry 318 12.744 16,6 5.755 14,6 22.692 21,8

Bulk Dry / Oil 0 0 0,0 0 0,0 0 0,0


Other Bulk Dry 16 166 0,2 114 0,3 211 0,2

B Bulk Carriers 342 13.117 17,1 5.981 15,2 23.217 22,3

General Cargo 125 911 1,2 867 2,2 1.363 1,3

Container 265 22.939 29,9 10.475 26,6 24.017 23,1


Ro-Ro Cargo 65 2.998 3,9 1.687 4,3 898 0,9

Other Dry Cargo 6 123 0,2 90 0,2 81 0,1

C Dry Cargoes 472 27.039 35,3 13.231 33,6 26.435 25,4

LNG Tanker 29 3.160 4,1 2.402 6,1 2.056 2,0

LPG Tanker 72 2.463 3,2 1.655 4,2 2.759 2,7

D Gastankers 101 5.623 7,3 4.057 10,3 4.815 4,6


Passenger (Cruise) 19 2.002 2,6 2.004 5,1 152 0,1


E Ferries / Passenger Ships 87 2.348 3,1 2.466 6,3 246 0,2

Fish Catching 43 59 0,1 153 0,4 0 0,0

Other Fishing 24 50 0,1 125 0,3 0 0,0

Offshore Supply 160 309 0,4 706 1,8 0 0,0

Other Offshore 57 788 1,0 816 2,1 0 0,0

Research 12 66 0,1 105 0,3 0 0,0

Towing / Pushing 261 97 0,1 464 1,2 0 0,0

Dredging 11 81 0,1 112 0,3 0 0,0


F Other Non Cargo Vessels 609 1.599 2,1 2.700 6,9 0 0,0

TOTAL 2.108 76.620 100,0 39.354 100,0 104.029 100,0

NEW ORDERS JANUARY - DECEMBER 2015 BY SHIPTYPES


PAGE 49 OF 54

Table 4- New Orders by Country 2015


BELGIUM 0 0 0,0 0 0,0

BULGARIA* 1 4 0,0 7 0,0

CROATIA* 15 331 0,4 244 0,6


DENMARK* 4 9 0,0 21 0,1

ESTONIA 2 1 0,0 3 0,0

FINLAND* 5 638 0,8 608 1,5

FRANCE* 2 4 0,0 8 0,0

GERMANY* 8 722 0,9 672 1,7

GREECE* 0 0 0,0 0 0,0

IRELAND 1 0 0,0 1 0,0

ITALY* 15 731 1,0 782 2,0

LATVIA 3 1 0,0 5 0,0

LITHUANIA* 0 0 0,0 0 0,0

NETHERLANDS* 22 64 0,1 101 0,3

POLAND* 29 54 0,1 114 0,3

PORTUGAL* 0 0 0,0 0 0,0

ROMANIA* 35 200 0,3 213 0,5

SLOVAKIA 0 0 0,0 0 0,0

SLOVENIA 0 0 0,0 0 0,0

SPAIN* 33 589 0,8 329 0,8

SWEDEN 0 0 0,0 0 0,0


A EU-28 185 3.370 4,4 3.147 8,0

ALBANIA 0 0 0,0 0 0,0

NORWAY* 17 50 0,1 93 0,2

RUSSIA 4 54 0,1 59 0,1


TURKEY* 79 153 0,2 278 0,7

UKRAINE 4 1 0,0 6 0,0

B OTHER EUROPEAN 104 258 0,3 436 1,1

EU-28 + NORWAY 202 3.420 4,5 3.240 8,2


JAPAN 513 20.555 26,8 10.222 26,0

KOREA (SOUTH) 276 23.634 30,8 10.120 25,7

CHINA 712 25.327 33,1 13.119 33,3

BRAZIL 6 10 0,0 22 0,1

INDIA 5 4 0,0 11 0,0

INDONESIA 33 52 0,1 88 0,2

MALAYSIA 21 16 0,0 49 0,1

PHILIPPINES 43 2.268 3,0 1.046 2,7

SINGAPORE 19 25 0,0 61 0,2

taiwan 15 363 0,5 269 0,7


VIETNAM 81 554 0,7 426 1,1

OTHERS 72 151 0,2 252 0,6

F REST OF WORLD 318 3.478 4,5 2.310 5,9

WORLD TOTAL1) 2.108 76.620 100,0 39.354 100,0

NEW ORDERS JANUARY - DECEMBER 2015 BY COUNTRIES


PAGE 50 OF 54

Table 5 – Completions by Shiptypes 2015


Crude Oil Tanker 61 6.041 8,9 2.013 5,4 11.237 11,9

Oil Products Tanker 68 342 0,5 329 0,9 520 0,6

Chemical Tanker 207 4.585 6,8 2.867 7,6 7.585 8,1

Other Liquids 0 0 0,0 0 0,0 0 0,0

A Tankers 336 10.968 16,2 5.209 13,9 19.342 20,5

Bulk Dry 616 26.272 38,8 11.533 30,7 47.438 50,4

Bulk Dry / Oil 0 0 0,0 0 0,0 0 0,0


Other Bulk Dry 26 140 0,2 117 0,3 183 0,2

B Bulk Carriers 644 26.519 39,2 11.695 31,1 47.808 50,8

General Cargo 161 1.202 1,8 1.058 2,8 1.833 1,9

Container 212 17.339 25,6 8.246 21,9 18.847 20,0


Ro-Ro Cargo 88 2.090 3,1 1.241 3,3 851 0,9

Other Dry Cargo 8 266 0,4 159 0,4 326 0,3

C Dry Cargoes 470 20.902 30,9 10.713 28,5 21.862 23,2

LNG Tanker 31 3.021 4,5 2.411 6,4 2.482 2,6

LPG Tanker 83 2.205 3,3 1.565 4,2 2.482 2,6

D Gastankers 114 5.226 7,7 3.976 10,6 4.964 5,3


Passenger (Cruise) 8 642 0,9 670 1,8 51 0,1


E Ferries / Passenger Ships 114 967 1,4 1.163 3,1 153 0,2

Fish Catching 153 139 0,2 420 1,1 0 0,0

Other Fishing 13 16 0,0 43 0,1 0 0,0

Offshore Supply 305 658 1,0 1.493 4,0 0 0,0

Other Offshore 92 1.706 2,5 1.446 3,8 0 0,0

Research 23 78 0,1 142 0,4 0 0,0

Towing / Pushing 417 135 0,2 663 1,8 0 0,0

Dredging 12 54 0,1 94 0,2 0 0,0


F Other Non Cargo Vessels 1.163 3.056 4,5 4.845 12,9 0 0,0

TOTAL 2.841 67.636 100,0 37.601 100,0 94.128 100,0

COMPLETIONS JANUARY - DECEMBER 2015 BY SHIPTYPES


PAGE 51 OF 54

Table 6 – Completions by Countries 2015


BELGIUM 0 0 0,0 0 0,0

BULGARIA* 1 3 0,0 6 0,0

CROATIA* 7 73 0,1 67 0,2


DENMARK* 0 0 0,0 0 0,0

ESTONIA 3 2 0,0 7 0,0

FINLAND* 2 111 0,2 125 0,3

FRANCE* 5 4 0,0 12 0,0

GERMANY* 10 384 0,6 375 1,0

GREECE* 5 4 0,0 12 0,0

IRELAND 0 0 0,0 0 0,0

ITALY* 6 219 0,3 254 0,7

LATVIA 2 1 0,0 5 0,0

LITHUANIA* 0 0 0,0 0 0,0

NETHERLANDS* 33 89 0,1 144 0,4

POLAND* 32 60 0,1 130 0,3

PORTUGAL* 0 0 0,0 0 0,0

ROMANIA* 39 485 0,7 346 0,9

SLOVAKIA 0 0 0,0 0 0,0

SLOVENIA 0 0 0,0 0 0,0

SPAIN* 27 38 0,1 107 0,3

SWEDEN 0 0 0 0 0


A EU-28 178 1.476 2,2 1.601 4,3

ALBANIA 0 0 0,0 0 0,0

NORWAY* 21 59 0,1 105 0,3

RUSSIA 14 47 0,1 72 0,2


TURKEY* 91 173 0,3 347 0,9

UKRAINE 4 1 0,0 6 0,0

B OTHER EUROPEAN 133 280 0,4 532 1,4

EU-28 + NORWAY 199 1.535 2,3 1.706 4,5


JAPAN 520 13.005 19,2 6.795 18,1

KOREA (SOUTH) 360 23.365 34,5 11.750 31,2

CHINA 941 25.160 37,2 13.326 35,4

BRAZIL 31 365 0,5 252 0,7

INDIA 26 26 0,0 65 0,2

INDONESIA 171 182 0,3 412 1,1

MALAYSIA 105 61 0,1 203 0,5

PHILIPPINES 40 1.865 2,8 943 2,5

SINGAPORE 22 11 0,0 43 0,1

Chinese Taipei (Taiwan) 55 748 1,1 522 1,4


VIETNAM 89 591 0,9 495 1,3

OTHERS 95 72 0,1 211 0,6

F REST OF WORLD 709 4.348 6,4 3.599 9,6

WORLD TOTAL 2.841 67.636 100,0 37.601 100,0

COMPLETIONS JANUARY - DECEMBER 2015 BY COUNTRIES


PAGE 52 OF 54

GLOSSARY AND ABBREVIATIONS: BDI – the Baltic Dry Index, it tracks changes in freight rates for dry bulk cargoes and is published daily by the Baltic Exchange in

London.

Bunker Fuel – type of fuel used aboard ships.

Cabotage - coastal trade, the movement of goods by ship between ports on the same coast or between ports within the same

country. Many nations, including the United States, have cabotage laws which require national flag vessels only to provide shipments

between domestic ports.

Capesize – a dry bulk vessel around 180,000 dwt or with a beam that prevents passage via the Panama Canal, forcing the ship to

pass around Cape Horn.

Cargo (also freight) – in maritime context, goods loaded into a ship and transported over a certain distance usually for commercial

gain.

SEA EUROPE members - Croatia (from 2002), Denmark, Finland, France, Germany, Greece, Italy, Netherlands, Norway, Poland, Portugal, Romania (from 2000), Spain, United Kingdom, Lithuania, Bulgaria (from 2009) and Turkey (from 2012)

Charter - hiring out of a ship by a shipowner.

Charterer - the person who has chartered the ship for a specified voyage or period of time.

Charter rate - the tariff applied for chartering tonnage in a particular trade. It depends on the charter type:

Spot charter – contract for the carriage of a single cargo from one specified port to another in the immediate future

(abt. 2 months). Spot charters can be spot voyage charters or spot time charters.

Voyage Charter - the charterer pays for the use of the vessel's cargo spaces for one or more voyages. Payment is

calculated per ton of goods carried. The owner pays voyage expenses.

Time charter - contract to charter a vessel over a fixed period of time at a set daily rate. Under time charters, the charterer pays voyage expenses.

Pool charter - a time charter with a floating charter rate. The actual charter hire the pool vessel receives is its

corresponding share of all the income generated by all vessels in the pool.

Bareboat Charter - contract to hire an empty ship, with all operating costs covered by the charterer.

CGT - Compensated Gross Tonnes - International unit of measure that facilitates the comparison of different shipyards’ production

regardless of the types of vessel produced. The CGT of a ship is calculated using a table of conversion factors published by OECD.

The conversion factors vary with ship type.

Classification Society - any organization that certifies seagoing vessels and their equipment for compliance with standardized

rules regarding construction and maintenance and carries out surveys at regular intervals of time and acts on behalf of the flag

state's maritime authorities.

Clarkson’s newbuilding price - The data reported represents the selection of ships covered by the Broker Clarksons. The

Ship Price Index of Clarkson’s historical data covers various sizes of the standard shiptypes. The Index only presents anticipated

prices (ex ante) not effective prices (ex post). The methodology used by the brokers is based on confirmed contracts where they

exist and brokers estimations for ship types where no transactions were registered. It should be also noted that the sizes per ship category have increased over time and that this creates as an “inbred inflation”. Therefore only the trends should be considered

as meaningful.

Deliveries - volume of completed ships.

Demolition – See ship breaking.

Dry dock - a facility for taking a ship out of water, an operation also know as “stemming” a ship. A drydock is normally either a

graving dock (a permanent civil engineering structure) or a floating dock.

DWT – deadweight tonnes, roughly equivalent to a ships carrying capacity measured in metric tonnes.

Freight rate - the charge made for the transportation of freight.

Flag of convenience (FOC) - term used about countries allowing unlimited registration of foreign-owned ships in order to

achieve low wage levels and low or no taxation payable to the flag state.

GT – Gross Ton; unit of 100 cubic feet or 2.831 cubic meters, used in arriving at the calculation of gross tonnage.

Hot rolled plate – steel plates of the type purchased for building the hull of the ships and other heavy constructions.

Hull - the body of a vessel, a steel structure not including any equipment and machinery.

IHS Fairplay (former Lloyd’s Register-Fairplay) – supplier of maritime data, including shipbuilding statistics. The definition of the

ships taken into account in the statistics of IHS Fairplay is commercial, seagoing vessels, self propelled and of more than 100 GT. The

coverage of the mega-yachts in the database is not homogenous due to the fact that registration/classification is not mandatory

for a non commercial (private) use. Finally this definition excludes naval ships.

IMO – International Maritime Organization, the maritime authority of UN tasked with the coordination of international maritime

safety and related practices.

Keel - the backbone of a ship formed from a series of connected plates running fore and aft on the bottom of the centre line of

the ship.

Knot - unit for measuring speed, equal to one nautical mile per hour or 1.852 km/h.

Lay-Up - temporary cessation of trading of a ship by its owner i.e. during a period when there is a surplus of ships (or over-

tonnage) in relation to the level of available cargoes.

Liner - A vessel, usually containership advertising sailings on a specified trade route on a regular basis

Merchant shipbuilding – building of commercial vessels

New Order – announcement and confirmation of a firm newbuilding contract

Orderbook – the vessels on the shipyards’ books between the new order and delivery stages.

Owner – in the maritime context, the owner of a ship, or shipowner.

Ship delivery – handover of a vessel by the yard to the owner after the completing the construction


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Ship Types – by segments or main shiptypes used in CESA Market Monitoring Report:

1. Mass segments - refers to standard vessels characterized by large market volumes, series production, standardization, limited

engineering content and a more limited number of subcontractors. Typical vessels:

Bulk carriers – all vessels constructed and equipped to transport dry, homogeneous, unpacked cargo in its holds, for

example Iron ore, limestone, grain, coal, fertilizers.

Containerships - ships equipped with container cells for the purpose of transporting cargo.

Oil Tankers - ships fitted with tanks to carry carrying either crude oil or oil derivatives.

2. Niche segments – refers to complex vessels characterized by smaller market volumes, small series with less repetition and

more prototypes and sister ships, tailor-made production, substantial engineering content, knowledge-based production and a

relatively large number of subcontractors. Typical vessels:

Chemical tankers – ships designed to carry relatively small parcels of higher value chemicals, such as acids or polymers

or cargos such as wine, molasses and similar products. Some chemical tankers are equipped with stainless steel tanks and

may carry different cargoes simultaneously, with each tank having its own pump and pipeline system for loading and unloading.

Gas Carriers or Gas Tankers – vessels specially constructed to carry gasses in tanks:

LNG tankers - carry liquid methane in refrigerated tanks at normal atmospheric pressure

LPG tankers - carry butane, propane etc in pressurised tanks at ambient temperature.

General Cargo ships – include a large number of specialized vessels designed to carry special, heterogeneous cargoes, including but not limited to:

Feeder Vessels - short–sea vessels which transfers cargo between a hub port and smaller ports.

Multipurpose ships – vessels that carry containers together with other cargo.

Reefers - vessels designed to carry goods requiring refrigeration.

Timber carriers, Pallet carriers, Car carriers, Cattle carriers etc Other Non Cargo Carrying Vessels include but are not limited to:

AHT –Anchor Handling Tug, vessels employed in the offshore activities moving anchors and performing towing

operations. AHT with combined characteristics of supply vessels is an AHTS.

OSV - Offshore service vessels or offshore support vessel - terms for specialized vessels used in activities connected to

the exploration, development and production of oil and gas at sea.

Special-purpose vessels – vessels not used for transport but designed to perform specific tasks (e.g. dredgers, tugs, pilot boats, pollution control boats, rescue boats, cable or pipe layers, research or seismic vessels, survey vessels, ice breakers,

fishing vessels etc)

Tugs - a small vessel equipped with powerful diesel engines to tow or push large ships or barges

Passenger Ships:

Cruise ship - passenger vessel carrying passengers on trips between various ports, normally with the same starting and

ending port with high standards of accommodation and recreation.

Ferry – vessel used to transport passengers or/and goods across a body of water in short periods of time. The market

divides into three main groups: Roll-on-roll-off (roro) ferries - tend to be large ships, often operating on relatively short

routes such as across the English Channel or the between Greek islands; Cruise-ferries - offer a higher standard of

passenger accommodation for longer routes and some of the facilities offered by cruise ships; Fast ferries that tend to

be smaller, may have multiple hulls (catamarans) and are often built from aluminium rather than steel.

Shipbuilding Area – geographical area with a high concentration of shipbuilding activities

Shipbuilding - the construction of a vessel including the installation of machinery and equipment.

Ship Maintenance, Repairing and Conversion - any repair of a vessel including, but not restricted to, alterations, conversions,

installations, cleaning, painting, and maintenance work.

Ship breaking - breaking down of a vessel's structure for the purpose of scrapping the vessel, including the removal of gear,

equipment or any component part of a vessel. Also referred to as demolition or recycling.

TEU – Twenty Foot Equivalent Unit, a measurement of cargo-carrying capacity of a containership.

Ton–Mile - measure used in the economics of transportation to designate one ton being moved one


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NOTES

SEA - Netherlands Maritime Technology · SEA EUROPE SHIPBUILDING MARKET MONITORING REPORT 40 OF...

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