New orders picked up from the previous month

New orders picked up from the previous month. New orders all over the world in November 2010 were 7.58 million DWT, grew 14% month-on-month and 16% year-over-year, respectively. From January to November, the global new orders totaled 110.14 million DWT, an increase of 141% year-on-year.

Bulk carrier orders accounted for the vast majority of new orders received in November. In November, bulk carriers traded 5.547 million DWT, oil tankers 937,000 DWT, and container ships 862,000 TEU. New orders for bulk carriers rose 13 percent year on year, while tankers fell 40 percent. Although orders for the tanker industry have fallen month-on-month, we continue to be optimistic about orders for tankers.

It is expected to receive a new order of 120 million DWT in 2010. Since the beginning of this year, new orders have gradually picked up, and the environment for ship seems becoming enabling. Currently, however, new orders are still in the stage of recovery, being difficult to rise in the future. We have our new orders of 120 million DWT in 2010.

The ship prices are basically the same as last month. In November, the cost index of new bulk carriers, oil tankers and container was point 150, 165 and 94, respectively. Container ships continued to rise slightly by 1.1%, oil tankers decreased slightly by 1.2%, and bulk carriers kept the same as the previous month. Compared with the same period last year, the cost of the three major ship types continued to rise, with the largest increase of 20.5% for containers. Bulk carriers and oil tankers rose 3.4% and 5.8% respectively.

Prices of major ship types remained stable. VLCC and Avra were valued at $105.5 million and $57 million, both down $1 million from the previous month. The price of the Cape of Good Hope was 57.25 million US dollars, slightly decreased by 750,000 US dollars, and the price of Panama was 34.5 million US dollars, the same as the previous month.

Ship prices are still at the bottom and shipyards' gross margins are still low. After a sharp decline, ship prices have fallen to the level in  2004. Although the ship price increased slightly in the environment that the steel price in at the bottom and the orders gradually recovered, we believed that under the influences of factors such as the gradually released production capacity and orders maintaining in low level, the ship prices can only float in the bottom without obvious increase. According to the current ship price, the shipyard gross profit rate is still low.

China received new orders of 4.45 million DWT this month; South Korea received a new order of 1.76 million DWT; Japan's new order is 1.15 million DWT. China's new orders soared from 2.5 million DWT last month.

Handling orders continued to decline year-on-year. At the end of November, handling orders of China, South Korea and Japan were 191 million DWT, 159 million DWT and 85 million DWT, respectively, continuing to fall by 7%, 12% and 23% year-on-year, respectively.

The delivery volume of new ships continues to decline. Globally, 6.29 million DWT of new ships were delivered in November,  decreased 23% year-on-year. New ship deliveries in China, South Korea and Japan were 3.07 million DWT, 1.6 million DWT and 1.12 million DWT, respectively. Volume of China increased 11.2% year-on-year South Korea and Japan both experienced sharp declines of 41.6% and 43.3%  year-on-year, respectively.