Will fewer vessels be scrapped?

Because of the value of the Indian Rupee, the incentive to scrap ships has declined.

This from Hellenic Shipping News

Oversupply pressures both in the dry bulk and the tanker markets, as well as in the container business are calling for a much slower newbuilding ordering activity during 2012. An additional factor expected to put pressure on shipyards is the lack of financing for many companies, especially those operating from the European continent. Meanwhile, as the year draws to a close, it’s worth noting that during the past week, the newbuilding pace was once again very slow, especially in the dry bulk and tanker markets.
According to the latest report from Piraeus-based shipbroker Golden Destiny, “Hyundai Heavy Industries announced that it signed a $900 million order to provide offshore platforms and other facilities off the coast of Africa. Under the deal, Hyundai Heavy Industries will build two offshore gas platforms in Nigeria by the end of 2014. In addition, Israel Land Development Company Energy is said to have signed an agreement of cooperation and development with DSME E&E, an energy related subsidiary of South Korea’s Daewoo Shipbuilding and Marine Engineering for the construction of a floating LNG facility at the Myra and Sarah has fields’ offshore Israel” said Golden Destiny.
The shipbroker also noted that overall, the week closed with 18 fresh orders reported worldwide at a total deadweight of 454,600 tons, posting a 49 % week-onweek decline, standing at similar weekly levels of 2010, when 17 orders had been reported worldwide with 7 newbuilding transactions in the bulk carrier segment. In terms of invested capital, the total amount of money invested is estimated at region more than $656 mil with 72% of the total number of orders being reported at an undisclosed contract price.
“In the bulk carrier segment, Safe Bulkers of Greece is said to have placed a panamax order of 74,500 dwt in an undisclosed Japanese yard for delivery in 2014. In the handysize segment, Belgian shipowner, Bocimar N.V. has placed an order for six plus 36,000dwt units in Weihai Samjin of China, plus an option for four more units, with delivery in 2013-2014.
In the offshore segment, notable order of this week has been the placement for the construction of an accommodation semisubmersible rig by the world’s largest owner and operator of accommodation and service rigs, Prosafe. The unit will be built by Jurong Shipyard, subsidiary of Singapore rig builder Sembcorp Marine at a cost of $291,6 mil for delivery in 2q 2014, with an option for another two units” concluded the shipbroker’s report.
In a separate note on the demolition market, Golden Destiny said that “the weak Indian rupee against the US dollar has dropped scrap levels at the lowest point for this year. India offers $450/ldt for dry/general cargo, same levels of the end 2010, with Pakistan being in the first rankings and China trying to compete at levels xs $400/ldt. In the wet market, levels remain below $500/ldt with Pakistan paying $480/ldt, but with lack of success as no units were secured. In Bangladesh, the market remains closed till the next court hearing on January 12th with mixed feelings for a reopening of the industry earlier than the end of January. What is noteworthy are market rumors suggesting the disposal of one more double hull VLCC built 1994 from BW group following the example of Mitsui OSK Lines. In the dry market, one more capesize of 173,028dwt built 1984 reported for scrap in India at $475/ldt, bringing the tally of capesize units reported for scrap this year at more than 20 units, whereas in 2010 only 3 capesize vessels had been reported for scrap.