Local Market Update from Singapore

How many more shipyards, offshore operators or commercial shipping lines must be teetering on the brink?

With many shipyards in Asia seeing financial losses on a major scale and struggling for new orders, shipowners facing impossibly low charter rates, layup anchorages full and oil still hovering at USD50 a barrel, it is hard be optimistic at the moment.

In the offshore sector, Swiber the Singapore energy services company filed for liquidation (now judicial management) at the end of July, shocking the markets and sending shares in offshore markets spiralling downward as a result. And of course we have seen Korea’s Hanjin Shipping, the world’s seventh largest shipping line, earn the dubious privilege of being the first major company of its kind to collapse recently, leaving ships and their cargo struggling to find a port where the vessels won’t be arrested.

The Chairman of Lloyds is suggesting recently too that Brexit may result in parts of the insurance market moving to other parts of the European Union if it loses access to the single market.

Braemar SA is seeing an increasing number of bareboat charter vessels handed back to owners, only to find they are in very poor condition with savings apparently being made at the expense of good maintenance. This is an indication that conditions are so tough that shortcuts are being taken.

We have also recently been involved with the assessing of a number of abandoned vessels at Asian layup facilities which will probably now be towed to scrap: a recent serious collision in the South China seas is an indicator showing that a casualty which would have been a repair case a few years ago is now a CTL, due to the depressed value of ships.


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