By MarEx 2016-03-07 17:37:20

Analysts with Clarksons Research have reported that bulk carrier demolition is heating up to record levels, with owners selling more – and newer – vessels to the scrappers.

By the end of February, 10 million dwt of bulkers with average age of 24 were sold for demolition – a total of 120 vessels, or roughly two per day. The first quarter is well on track to surpass the record of about 11 million dwt scrapped in Q2 2015, Clarksons said, a reflection of the dismal state of the market. Even a few vessels built in the 2000s are getting cut up.

Clarksons compared the current market to past periods of high activity, like the demolition of six percent of the world’s bulker fleet in 1986, five percent in 1998, and - in 2012, the busiest year on record by tonnage – a total of 33 million dwt sent to the breakers, also about five percent.

The analysts count over 100 capes and over 150 panamaxes aged over 20, suggesting that the pace of demolition could continue for some time.

Steel scrap prices as of February 2016 were less than half of the level seen in early 2012, according to SteelBenchmarker, suggesting that owners could be getting less for their aging vessels than they did during the last banner year for shipbreaking. Scrappers are feeling the pinch – with steel prices so low, many Chinese scrapyards are having a hard time reaching the breakeven point or even selling the scrap at all, said Wu Jun, vice-president of the China National Ship-recycling Association.

Rigs are also going to the breakers in record numbers. 44 were scrapped between late 2014 and late 2015, as many as had been cut up in the previous two decades combined. Drillers Ensco said in February that their firm alone had scrapped a dozen, including one drillship. Analysts say that many more have got to go. “There are at least about 100 rigs that need to be taken out from this market,” said Jon Fredrik Muller, senior project manager at oil and gas consultancy Rystad Energy.

By MarEx 2016-03-07 14:54:25

ClassNK executive vice president Koichi Fujiwara has been appointed as chairman, president and representative director of the Japanese classification society, effective Monday.

Noboru Ueda has stepped down as representative director, chairman and president.

In addition, executive vice president Tetsushi Agata has been appointed executive auditor as part of ClassNK's aim to strengthen its auditing system, and executive vice presidents Yasushi Nakamura and Tetsuya Kinoshita will continue in their present roles, joined by Junichiro Iida as managing director.

Mr. Fujiwara said that “following the recent downturn of the shipping and shipbuilding markets, the business environment surrounding ClassNK has become even more challenging. Under our new executive team, we will work to ensure stable operations and further enhance our corporate governance.”

Mr. Fujiwara holds a masters in naval architecture from the University of Tokyo, and served in Japan’s Ministry of Transportation. He assumed the role of director-general of the Ministry’s Maritime Bureau in 2006, then joined ClassNK in 2007. At ClassNK, he rose to managing director in 2010, then executive vice president in 2011, with responsibility for the expansion and development of the society’s certification services. The society now has vessel survey offices in more than 70 locations and representation in all major ports.

In 2012, ClassNK's register surpassed the 200 million gross ton mark, making it the first classification society in history to pass that milestone. But the merger of Det Norske Veritas and Germanischer Lloyd created DNV GL later that year, surpassing ClassNK with a total of about 350 million gross tons on registry, or about 18 percent of the global fleet.

Under outgoing president Noboru Ueda's leadership, ClassNK set itself the goal of regaining pole position as the largest classification society, with the aim of increasing the proportion of its non-Japanese membership to 50 percent.

But in addition to international competition from DNV and others, the society also faced reputational challenges from the loss of the MOL Comfort, a ClassNK-registered vessel that broke up and sank at sea in 2013, leading to $400 million in insurance claims and hundreds of millions in lawsuits against her builder, Mitsubishi Heavy Industries. The final IACS report into her loss suggested that the hull fracture probably originated from the bottom shell plates in MOL Comfort’s midship section, and it recommended changes to IACS rules on the methods for calculating hull strength. 

By MarEx 2016-03-07 13:17:08

The grounded bulker New Katerina has been refloated, twelve days after she went aground in the Suez Canal, according to local media reports and AIS tracking data.

As of Monday morning, the Katerina had travelled north from the position of her grounding and stopped in a branch of the canal north of Al Firdan, according to her AIS.

Egyptian outlet Al Wafd reported that the 170,000 dwt bulker suffered multiple hull breaches in the grounding, flooding several cargo holds containing iron ore. The casualty required days of lightering to reach the damaged sections for temporary repairs.

The Suez Canal Authority said that traffic was not affected thanks to the New Suez Canal expansion's separate northbound and southbound waterways. The expansion opened last year, adding 40 nautical miles of parallel channels and dredged lanes. The New Katerina went aground in one of the two parallel waterways at kilometer 63, just north of Ismailia.

The Canal Authority said that it lightered and refloated the vessel using its own assets. Work proceeded 24 hours a day for several days with a clamshell bucket and crane, scooping out the iron ore and loading it onto six carriers.

“The international navigation channel [operated] regularly and did not stop, and we [worked] day and night to develop the . . . service provided to the movement of world trade,” said the head of the Canal Authority, Admiral Mohab Mamish.

The bulker went aground on February 25 while en route southbound on a voyage from Ukraine to Qingdao, China. Investigation into the cause of the grounding is ongoing.

New Katerina (ex name Katerina Warrior) was built in 1997 by Daewoo. Her ClassNK registry, last updated in June of 2015, lists her owner as Olympus Ventures and her management company as New Shipping Limited.

By Reuters 2016-03-07 12:09:06

A Japanese submarine will visit the Philippines for the first time in 15 years, along with two warships that will then sail on to Vietnam, in a show of support for nations opposed to Beijing's ambitions in the South China Sea, a person familiar with the matter said.

The Japanese submarine, which is used for training, and the destroyers will arrive in the Philippines in April. The escort vessels will later sail to Vietnam's strategic Cam Ranh Bay base on the South China Sea, the source said.

"It sends a message. It is important for Japan to show its presence," the person with knowledge of the plan said on Monday. He asked not to be identified because he was not authorized to talk to the media.

A Japanese Ministry of Defence spokesman declined to comment on any submarine visit but said the navy normally conducted training voyages in March and April.

"But we are still in the planning stage so are unable to provide details," he said.

The visits were first reported by Japanese media, including the Sankei newspaper, on Sunday.

Asked about the visits, Chinese Foreign Ministry spokesman Hong Lei said Japan occupied the Spratly Islands in the South China Sea during World War Two so China was on "high alert" for Japan's military moves there.

"The cooperation of relevant countries should benefit regional stability and should not be directed at third parties or harm another country's sovereignty or security interests," he told a daily news briefing in Beijing.

Of the countries bordering the South China Sea, the Philippines and Vietnam are most opposed to China expanding its influence in the region by building bases on reclaimed islands.

The Philippine military had not received any official notification of a visit by a Japanese submarine, a military spokesman said, though a visit to the Subic Bay naval base was expected.

"Informally, we know a Japanese submarine is visiting Subic in April," said the Philippine spokesman, Brigadier-General Restituto Padilla.

Rich in natural resources, the South China Sea is also a major thoroughfare for global trade worth up to $5 billion a year, much of it coming to and from Japanese ports.

The United States, which has asked China to halt reclamation work that could destabilize the region, has irritated China by conducting naval patrols close to the man-made outcrops in what are known as freedom-of-navigation operations.

Rather than confronting China in such a direct way, Japan instead wants to build the capacity of nations in the region to improve their surveillance of Chinese forces. Japan's Minister of Defence Gen Nakatani is due to travel to the Philippines in April to discuss cooperation.

Japan has already offered to supply the Philippines with aircraft that will help bolster patrols over the disputed sea. Japan wants to give the Philippines a handful of Beechcraft TC-90 King Air training planes that could be fitted with basic surface and air surveillance radar.

The Philippines has also asked the United States to hold joint naval patrols.

Japan and Vietnam agreed in November to hold their first joint naval exercise.

The United States has no South China Sea claim and says it takes no sides, though it has been highly critical of China's assertiveness and says it will protect freedom of navigation.