SHIPPING AND SHIPBUILDING MARKETS - 2001 THE CONTAINERSHIP MARKET IN 2000 The fleet The cellular fleet doubled during the past seven years, in teu terms. At 31 December 2000, there were 2,755 cellular ships aggregating 4,900,000 teu. The annual progression stands at 9.3 % during 2000. In 1999, an increase of only 5.1 % was observed, contrasting strongly with the 10-15 % annual rises registered in the years 1995-1998. The cellular fleet amounts to 71.3 % of the overall teu capacity, which totals 6,860,000 teu. This figure was only 55 % ten years ago. The fleet of multipurpose box shaped cargo vessels provides a further 660,000 teu, representing 9.6 % of the total teu capacity (up from 7.9 % ten years ago). Conventional cargo vessels, roro ships, conros, conbulkers and reefer ships share the remaining 19 % of the capacity. Fleet as at 31 December 2000 Cellular Box non-cellular Size range nb teu % p.a. nb teu % p.a. > 5000 teu 98 590,613 47.8 % 4000 / 4999 teu 178 779,630 11.8 % 3000 / 3999 teu 210 726,934 2.8 % 2000 / 2999 teu 431 1,070,221 4.9 % 1500 / 1999 teu 371 627,157 10.1 % 16 28,539 0.0 % 1000 / 1499 teu 480 574,436 0.1 % 94 106,780 21.1 % 500 / 999 teu 547 387,967 3.9 % 301 200,332 14.1 % 100 / 499 teu 440 135,801 0.4 % 1,365 324,346 5.8 % Total 2,755 4,892,759 9.3 % 1,776 659,997 10.2 % Source : BRS-Alphaliner The Containership Market in 2000 1
Cellular Ships : Deliveries / Orders - Year 2000 Deliveries Orders Size range nb teu $ M nb teu $ M > 5000 teu 32 191,136 2,029 70 438,175 4,491 4000 / 4999 teu 18 82,443 867 59 253,843 2,694 3000 / 3999 teu 7 22,993 272 12 39,383 440 2500 / 2999 teu 6 15,488 209 34 89,902 1,081 2000 / 2499 teu 14 32,353 469 49 118,778 1,486 1500 / 1999 teu 35 58,307 922 34 57,788 881 1000 / 1499 teu 8 9,276 166 29 33,222 530 750 / 999 teu 9 7,441 n/a 14 12,176 n/a 500 / 749 teu 10 6,495 n/a 5 3,452 n/a Total 139 425,932 4,934 306 1,046,719 11,603 Source : BRS-Alphaliner 139 cellular ships were delivered in 2000, for 426,000 teu. Fifty ships of 4,000 teu and above, all dedicated to the East-West trades provided 64 % of this capacity. Most of these large ships were delivered during the second half of the year. These massive deliveries triggered off a cascade effect, which, at the end, left several ships of 1,200 / 1,800 teu without employment. The orderbook rose strongly during 2000, with further commitments for 6,000+ teu ships and a wave of orders for Panamax tonnage and for 2,500 teu ships. There were 306 cellular ships on order for 1,046,719 teu as 31 December 2000. During 2000, only 16 cellular ships were scrapped and another two converted or lost, for a total of 18,959 teu. According to our estimates, the combined value of ships of 1,000 teu and more ordered during 2000 stands at $ 11.6 bn. By comparison, the ships delivered had a combined contractual value of $ 4.9 bn. Newbuilding prices increased like other types of ships all through the year, and owners who launched their newbuilding programs in 1998 won a bonus on their future daily running costs. This will help, in the event of a turnaround in the market. As owners feared further price increases, they ordered ships by batches. All types of ships were affected. However, large container ships of 5,000+ teu were not ordered at the same levels as in the previous year. This is good news for owners of chartered tonnage as massive ordering of large container ships is raising some worries. These price rises combined with a depressed euro is a bonus for European yards. The 15 % slide of the euro against the US dollar during the past 12 months has helped especially German yards to fill their orderbook and bring them near their Asian counterparts in terms of berth occupancy. Very Large Container Ships (VLCS) of 9,000 teu and more are now viewed as a serious option. Several operators consider VLCSs. Maersk-SeaLand appears as the leading line with such ships, possibly around 12,000 teu (they could be built by APM s Odense yard). P&O Nedlloyd plans to order 10,000 teu ships. China Shipping Group is considering 9,000 teu ships. Other leading operators are also studying the possibility to invest in 8,000 / 10,000 teu ships. Most of the pure reefer ships built during the past decade are fitted to carry containers on deck and, in some cases, under deck. Our count shows that 178 of them offer an intake above 100 teu, for a total of 44,000 teu. This represents a mere 0.6 % of the total teu fleet. This share has remained about the same over the years (we had it at 18,300 teu in 1992, on 78 ships). It is worth noting that less than 15 % of the 428,000 teu conbulker fleet is operating on conventional liner markets (including mixed operations, but excluding regular parcel trades). In 2000, several conbulkers of 1,300 / 2,000 teu were regularly employed on pure container trades because of the cellular tonnage shortage. The charter market The year 2000 started bullish and is finishing on a bearish trend. Rates reached their peaks in September. Rates doubled on the average since the lows of the spring 1999. However, some sizes benefited more than others, with larger ships performing better than smaller ones. This rise can be explained by two factors : the seaborne container trade enjoyed a boom and deliveries of ships were at a low ebb, especially during the first three quarters of the year. At mid-year, there were a shortage of 1,500 / 3,000 teu ships (and of Panamaxes as well). Charterers 2 Shipping and Shipbuilding Markets 2001
had difficulties to find substitutes, especially for long periods. After a peak during the summer, rates started to decline in October, at least for medium-sized ships. The prompt availability of several ships in the 1,200 / 1,800 teu range during the fourth quarter has driven rates down. This decline can be explained by a convergence of adverse causes. Acceleration of deliveries of 5,000+ teu tonnage in the second half of the year. This induced a cascade effect that hit medium-sized ships of 1,500 teu (+/- 300 teu) more than other categories. Operators such as Evergreen / Uniglory, COSCO and Cheng Lie continued their policy of chartering out their own tonnage (especially in the 1,400 / 1,700 teu bracket). The takeover of Norasia Line by CSAV in June, led to rationalisations and a significant reduction of the combined fleets. Before the deal, both fleets ran a total of 69 ships for 114,000 teu, six months after, the combined fleet stood at 54 ships for 97,000 teu. This means that about 17,000 teu of chartered tonnage went back on the market during the second half of the year. The reduction was shared about 50 / 50 between Norasia and CSAV units. The FESCO and Great Western Shipping Line regrouping on the Pacific (in November) led to the disposal of four 1,500 teu ships. Active operators of the first half of the year, such as China Shipping or CMA-CGM, were quieter thereafter, although they were relayed by K Line and Sinotrans but on a more modest scale. It is also worth pointing out that the fleet increases observed in 2000 by major carriers matched almost perfectly with the materialisation of newbuilding programs (owned or long-term chartered), which of course lessen the needs for short / medium-term chartered tonnage. The Maersk-Sealand-Safmarine s fleet rose by 74,000 teu over the year, with the delivery of twelve ships totalling 76,000 teu. Internal growth at P&O Nedlloyd (obtained after the exclusion of the impact of Farrell Line and Harrison buying) stood at 50,000 teu, with the delivery of 13 ships for 56,000 teu. Conversely, the growth of 15,000 teu of the CMA-CGM fleet involved chartered tonnage only. Most shipyards are fully booked until early 2003, and even until end 2003 for some of them. One must go back to 1972-1973 to find such a healthy orderbook, although it was at that time heavily dominated by VL/ULCCs and the bubble burst out in the wake of the October 1973 oil crash. The current orderbook is better balanced as it consists of a large variety of ship types. Hence, there is little worry about overcapacity on the container ship market in the medium term. However, the supply / demand balance will remain fragile. With world trade booming, and the shipping demand partly fuelled by the rise of China s foreign trade, the demand for container transport is to remain strong. At least until a sudden and unexpected storm darkens this clear blue sky. A hard landing of the US economy is the most frightening scenario. Containerships time charter rates - evolution 1998-2000 (100 = January 1998) 140 120 100 80 60 40 1,000 teu 1,700 teu 2,500 teu 20 0 Jan 98 Feb 98 Mar 98 Apr 98 May 98 Jun 98 Jul 98 Aug 98 Sep 98 Oct 98 Nov 98 Dec 98 Jan 99 Feb 99 Mar 99 Apr 99 May 99 Jun 99 Jul 99 Aug 99 Sep 99 Oct 99 Nov 99 Dec 99 Jan 00 Feb 00 Mar 00 Apr 00 May 00 Jun 00 Jul 00 Aug 00 Sep 00 Oct 00 Nov 00 Dec 00 The Containership Market in 2000 3
Ships over 3,000 teu The market for ships of 3,000 / 4,500 teu was very tight all along the year. The dearth of 4,000 teu ships was not anticipated. In 1998-1999, owners focused on the 5,500 / 7,000 teu range for their new ships. This rarity effect triggered off a spate of orders of Panamax ships in 2000, either speculative or linked to charter commitments with top carriers. Anticipating a difficulty to find the right tonnage at the right price, charterers are engaged in a clear trend to fix large ships for two to four years period, and even more in the case of newbuildings (especially for Panamax ships). Concerning the 4,000 to 4,999 teu range, no less than 59 ships were ordered over the year. This is a figure to be compared with the nine ships booked in 1999 and the 19 ones booked in 1998, which boost the orderbook to 66 units in this range (figure at 1st January 2001). However, Panamax ships may be over-ordered and it seems that supplementary ships planned for delivery in 2003 on a speculative basis will not easily find charterers. Among owners having ordered Panamax ships for the charter market, German owners remained prominent, with Peter Döhle, Bertram Rickmers, Laeisz Schiffahrts and Claus Peter Offen ordering a total of 22 units in 2000. Vancouver-based Seaspan and the Ofer Group were prominent players with a total of 12 orders. Most of these orders are backed by long-term charters, except for some of the Döhle / Rickmers orders that appear to be speculative. At some stage, the chartering activity was reduced because of the lack of available tonnage, resulting from both a sustained demand and an historical low in deliveries of new ships. CMA-CGM, China Shipping, K Line, P&O Nedlloyd and Sinotrans put the 3,000 / 4,000 teu market under pressure. They mopped up the available ships until the end of 2001, including newbuildings. But the tensions eased after that several operators entered into long term commitments for large newbuildings expected to come on stream in 2002-2003. Nevertheless the availability of 3,000+ teu tonnage at short notice remains very low. Ships of 4,000 teu were negotiated at $ 24,000/ 25,000 at mid year, as shown by a 3,915 teu ship (23 kts on 130 tons), extended for 24 months by Yang Ming at a reported $ 24,200. Four 4,038 teu ships delivered in November and December to Hansa Mare were chartered as early as August for a duration of about three to five years at daily rates of $ 27,500. Three of them went to CMA CGM Matisse 2,205 teu, blt 1999 by China SB, operated by CMA-CGM Group. 4 Shipping and Shipbuilding Markets 2001
Sinotrans while K Line took the fourth one. The fact that these operators secured them well before delivery is further evidence of how strained the market is for this category. CMA-CGM fixed three 4,000+ teu newbuildings for periods running up to 4 and 5 years at $ 25,000 / 26,000. During the summer, 3,500 teu ships reached rates usually enjoyed by 4,000 teu ones. A 3,534 teu ship (23 kts on 110 tons / 1995) was fixed by K Line for 2.5 years at $ 26,000, for an October delivery. Later in the year, we observed a clear downward trend with some owners fixing long-term period at very discounted rates; in November, a 3,330 teu ship (21.8 kts on 87 tons / 1993) was fixed by COSCO for five years at a reported $ 18,000 (laycan in March 2001). This same month, MSC fixed a Hyundai 2900 (2,808 teu / 22 kts on 102 tons / 1996) for 18-24 months at $ 18,500. Given this, all eyes went on the rare chance of seeing 3,000 / 4,000 teu ships which would come available on the market. Such opportunities arose, with both Hyundai and Safmarine subletting each one 3,000 teu tonnage which became redundant after rationalisations on the lines where they were employed. In November, a trio of 3,177 teu veterans (3,177 teu / 22 knots, built 1972-73) were also extended for 12 months by China Shipping at $ 13,000. China Shipping also extended an Evergreen G type (2,868 teu / 1984) for 12 months at $ 15,850. Ships of 2,500 / 3,000 teu The market entered a bearish phase in the latter part of the year after the bull run of the previous months. Rates for 2,500+ teu ships remained strong but were no longer rising. Rates for ships of 2,800 / 2,900 teu reached a rather stable peak during the summer. In September, a Hyundai 2900 ship (2,959 teu / 22 kts on 102 tons / 1998) was fixed by K Line for one month at a reported $ 24,000, starting November. The market remained nevertheless fairly balanced for ships of 2,500 / 3,000 teu. There were few opportunities but charterers remained quiet. Zim s plans to upgrade its Zim Pacific Service in 2001 from the 1,700 teu scale to the 2,500 / 3,000 teu one will help to keep rates firm in the medium term. Ships of 2 000 / 2 500 teu The demand remained strong during the first half of the year while the availability of ships was limited. This high demand came at a time when several Gdynia 2000 ships were immobilised for several months in order to change a major default on their main engine. The market entered a bearish phase in the latter part of the year after the bull run of the previous months, with a relatively high level of availability and a slack demand. Rates remained flat despite this trend but were no longer rising. Rates remained sustained for a 12-month period, while charterers covered long-term positions at lower levels with tonnage chartered for 36 or 48 months. From $ 12,000 in the winter 1999-2000, rates for Gdynia 2000 ships (2,078 teu / 21 kts on 72 tons / 1995-97) went up to $ 17,000 in March. A ship of this design was fixed early November by Hamburg- Süd for 12 months at $ 17,750, with an option attached for a further 12 months at $ 18,750. Two Gdynia 2000 newbuildings were also fixed for 12 months by Lykes at a reported $ 18,000. In December, modern 2,500 teu tonnage could be obtained for a 12-month period at around $ 17,000 / 18,000 instead of $ 22,000 in September. A number of 2,500 teu newbuildings coming on stream in 2001 / 2002 were also chartered by batches. There was a consistent influx of orders in the 2,400 / 2,750 teu range, which was dominated by German owners. 74 ships were ordered in the course of the year in this narrow band. However, this sudden and massive ordering of 2,500 teu tonnage can be seen as a correction as there were so few orders in the 2,000 / 3,000 teu range in 1998-99. And it is market driven and not tax driven as it was in the mid-1990s. Ships of 1,500 / 2,000 teu The 1,500 / 2,000 teu size range market was very contrasted. During the first half of the year, a sustained demand combined with an unusual low number of newbuilding deliveries led to a severe shortage. The demand was not only fuelled by operators for their usual North-South routes, but also to plug gaps in East-West sailings, or even to make extra sailings (mainly ex China). Humble 1,600 teu ships were thus diverted from their usual work to go along with much larger ones. With a lack of cellular tonnage in this category, conbulkers made a comeback. Some of them were equipped (or re-equipped) with the needed lashing gear to take advantage of the rates increase. Szczecin-built B-170 s rates passed the $ 15,000 mark during the summer, against $ 13,000 in May. CC1600s The Containership Market in 2000 5
and Thyssen 1500s were also negotiated at rates circa the $ 15,000 mark during the summer period. Uniglory took advantage of these strong rates through the chartering out of three of their P class ships (1,618 teu / 18.5 kts on 41.5 tons / 1999-2000) to GWSL for a 24 month-period at a healthy $ 15,500, agreed upon in May for a July laycan. After a sparkling first half, the market for 1,500 to 2,000 teu ships entered a period of hesitation at the end of the summer. The number of ships available remained low but the demand was itself lower. Some of the few ships open for charter were fixed at the very last minute. The rationalisation of the Europe-ECSA trade by Maersk-Sealand and Hamburg-Süd may have played a role at this time. In November / December, the 1,500 / 2,000 teu range suffered a lot from an unexpected high number of prompt ships and few charterers. The cascading effect took its toll while rationalisations on some lines using 1,300 / 2,000 teu tonnage have driven ships out. Some ships had to wait several days or weeks before finding employment. The glut of open ships for prompt delivery is partly explained by the relet of ships that were initially expected to be open for charter in the first half of 2001. The FESCO / GWSL agreement leads to replacing of two services using a total of nine or ten 1,300 / 1,700 teu ships by a single loop using five 1,600 / 1,700 teu ones. Not only ships of 1,500 / 2,000 teu are squeezed out of the East-West liner trades through such rationalisations, but they also suffer from the introduction of 2,000 / 3,500 teu tonnage on key North-South trades (especially for South America). In a perfect world, they should shift to feeder trades or to intra- Asia trades, from where they would kick-out the 1,000 / 1,500 teu ships, and so on. The reality is different. Ships of 1,500 / 2,000 teu are still too big for most of the feeder trades and many intra Asia long haul operators (East of Singapore) stick to their 1,000 / 1,500 teu ships. Given this, it is not surprising that rates fell. Very few charters were concluded in the last weeks of the year. As more ships were building up, owners had to accept much lower rates. In December, B-170s were traded at around $ 12,500. Confirming the downward trend, two 1,740 teu newbuildings with a good speed (20.5 kts on 58 tons / 2001), were fixed by ANZDL for 12-14 months at $ 13,550 / 13,800. A low was reached by a BV 1700 (1,684 teu / 19 kts on 48 tons / 1995) which went to Heung-A in December for 12 months at only $ 10,500. Ships of 1,250 / 1,500 teu The demand for ships in this size range remained consistent while the supply remained limited, at least until October. Furthermore, very few newbuildings were delivered (as well as in the 1,000 / 1,250 teu range). This is reflected in rates obtained by CS1400 vessels (1,388 teu / 18.5 kts on 46 tons / 1992-1995), which reached the $ 13,500 mark during the summer. After these exceptional months, ships of 1,250 / 1,500 teu started to suffer for the same reasons as their 1,500 / 2,000 teu counterparts. Owners had then to accept lower rates than those enjoyed early September. In May, a B-186 (1,354 teu / 19.5 kts on 48 tons / 1994) was negotiated at $ 13,200 with a July delivery for a 24-month period. In June, a sister ship was fixed by CMA-CGM at $ 13,875. In December, a sister vessel accepted $ 9,600 for 12 months with Kien Hung. Illustrating the ups and downs throughout the year, a Merkur II class ship (1,438 teu / 19 kts on 63 tons / 1982 - ice class), was extended in May for six months by Maersk-SeaLand at $ 11,250, a strong rise against the $ 6,500 it made in November 1999 for a similar extension. The same ship went in December to Senator Linie for a period of about four months at $ 8,200. In June, a trio of 18 years old Merkur II ships went to APL for $ 10,800. Ships of 1,000 / 1,250 teu Despite a rise and fall in rates over the year, the 1,000 / 1,250 teu ships were less affected than the 1,250 / 2,000 teu ones. The rate increase observed since the 1999 lows were also less spectacular. However, a few ships became prompt as the year 2000 came to its end and this put the rates under pressure. But the demand matched the offer and charter rates remained strong until collapsing at the turn of the year. Rates peaked during the summer. In July, CMA- CGM extended a VW 1100 ship (based on BV1000-1,122 teu / 19.5 kts on 44 tons / 1996) for 12 months at $ 11,200 while a sister ship was fixed to DAL for $ 11,125. In September, a sister ship got $ 11,050 for a six month charter with Costa for its Transatlantic triangular service while two Sietas Type 146 (1,048 teu / 18.5 kts on 40 tons / 1994) were extended for 12 months by P&ON at $ 11,450. B-183 / RW49 type (1,012 teu / 17.5 kts on 29 tons / 1992-97) got $ 6,500 in January. Rates went 6 Shipping and Shipbuilding Markets 2001
Maersk-SL + Safmarine P & O Nedlloyd Evergreen Group Hanjin / Senator Mediterranean Shg Co APL COSCO Container Lines NYK CP Ships Group CMA-CGM Group Mitsui-OSK Lines K Line Zim OOCL Hapag-Lloyd Yang Ming Line China Shg Group Hyundai CSAV Group Hamburg-Süd Group Pacific Int'l Lines UASC Wan Hai Lines Delmas Group Cho Yang Line 0 Liner operators Top 25 - as at 31 December 2000 Operated fleets Based on existing fleet at 31 December 2000 teu capacity available on board operated ships - All subsidiaries are consolidated - (Source: BRS-Alphaliner) In '000 teu 100 200 300 400 500 600 700 www.alphaliner.com up to $ 8,000 / 8,500 in May. In September, they were negotiated at their highest, circa $ 9,000 / 9,200 for a 3 or 6-month period. In November and early December, such ships obtained $ 8,000 / 8,300 for commitments of six to nine months. The enhanced version (1,162 teu) got around $ 8,000 / 8,500 in March and peaked at $ 10,000 / 10,500 in September / October for a three to twelve month period. It went back to circa $ 9,500 in November for a 12-month period. Nevertheless, rates went down abruptly at the turn of the year as shown by the $ 7,500 obtained in late December by a Gdynia 8125 - Planet (1,128 teu / 18.5 kts on 37.5 tons / 1995) for a three month-period with Hanjin. A low rate which also reflects the fact that this ship had been relet by its previous charterer and was opened prompt. In October, a sister ship obtained $ 11,000 for a sixmonth commitment. Stadt 1100 ships (1,102 teu / 20 kts on 42 tons / 1998-99) got $ 10,000 in May, reflecting a slight premium for speed. This premium was also reflected with a series of 1,216 teu fast newbuildings (1,216 teu / 22 kts on 63.5 tons / 2000), which obtained $ 10,000 / 10,500 in May and $ 11,000 in December. They are deployed, or will be deployed, on intra Asia services. This is an interesting development as it shows a need for speed, which may cause a rise in demand for such ships by other intra Asia operators. However, at 22 knots, these 1,200 teu ships are quite unique. Ships under 1,000 teu Rates for 800 / 1,000 teu ships climbed progressively during the year. There is a strong demand coming from regional feeder trades. Illustrating the trend, a Turkey-built Box class ship (812 teu / 18.5 kts on 33 tons / 2000) went to Shandong Marine at mid year for $ 6,700 while her sister obtained $ 6,100 in April. In August, a sister ship went to CMA-CGM for six months at $ 7,250. In September, ships of 800 to 1,000 teu enjoyed a mini-boom. Fast, modern tonnage in this category passed the $ 10,000 mark, a level unseen since the peak period of 1995-96. However, rates did not explode as they did for the large vessels but neither had they plunged as deep. Another factor may prevent any exaggerated rise: there are plenty of compact multipurpose tonnage around plying tramp trades that can easily be transferred to the feeder ship market. A Szczecinska B-188 newbuilding (907 teu / 18.5 kts on 34 tons / ex-yard September) was reported fixed by Costa Container Lines in August at $ 8,750 for 12 months. Existing B-188 ships, which are slower (907 teu / 17.5 kts on 31 tons / 1995-1999) obtained about $ 8,100 / 8,600, against $ 7,500 four months earlier. There is also a premium for speed in this category, as shown by the 12 months extensions by DAL of two Sietas Type 155 (910 teu e 19 kts on 37 tons / 1996) at $ 10,900. The Containership Market in 2000 7
By comparison, two older and slower Nordsino - type ships (844 teu / 15 kts on 22 tons / 1983) were extended in September for 12 months by Hub Line at $ 5,500 for local intra Asia trading. Ships of 600 / 700 teu are not performing as well as their 800 / 1,000 teu counterparts. In October / November, modern 650 / 700 teu cellular ships got $ 6,200 / 7,300, according to their speed. Two Sietas Typ 156 (646 teu / 17.5 kts on 32 tons / 1995) were extended for 12 months by OOCL at $ 7,225 / 7,325. Two Hakata 600 L sisters (653 teu / 15.5 kts on 21 tons / 1997) were extended in October by APL and PIL for six and twelve months at $ 6,200/6,350 while a sister got $ 6,600 from P&ON one month earlier. Signs of a slight improvement were also observed for the 500 / 600 teu range. Modern ships of 500 / 520 teu got $ 4,700 at mid year, against $ 4,300 / 4,400 two months earlier. Rates for RW 39 ships (582 teu / 15.5 kts on 19 tons / 1980-1986) took off from the $ 4,000 / 4,200 in January to reach $ 5,000 in March, $ 6,000 in July. Rates remained strong, at around $ 6,000, for the latter part of the year. However, in July, two Marcon 400 ships (408 teu / 16 kts on 17 tons / 1997) were fixed respectively to Associated Transport Lines (extension) and CMA- CGM at a reported $ 4,350. This shows a rate slide as both were fixed at a stagnant $ 4,700 during the past 12 months. The containerships second-hand market The chronic shortage of large ships (above 2,500 teu) and the impossibility to obtain newbuildings with a short notice may have triggered-off a decision, not seen in the recent years from a large operator to consider secondhand ships as a way to boost its fleet (with the notable exception of MSC). CP Ships has bought seven ships of around 3,000 teu to continue to develop the activities of its subsidiaries. This decision provides also an indication that the charter market for such ships is expected to remain bullish and on the owners side for some time. Besides CP Ships, Norwegian and Israel buyers have dominated the second-hand market, confirming the trend observed in 1999. Sellers have been mostly East Asian operators needing cash in order to keep afloat their operation or to improve their end year results. It can be said that without these sellers, the volume of second-hand deals for ships above 2,500 teu would have been reduced. The market for these large ships was shared equally between sales/charter-back deals and straight sales. Cash-strapped Korean owners continued to sell ships with t/c back. Norwegian owners continued to show an interest into buying such ships. This move can be interpreted as a wish to diversify their assets in order not to rely only on the bulker or tanker sectors. In 2000, Korean owners Hyundai and Choyang have sold 10 ships of 2,700 to 4,400 teu, all with charters back to the sellers. The number of large Korean ships sold since the beginning of the Asian financial crisis in 1997 amounts to 26 sales. In addition to this, an order for five 6,400 teu ships, reported as contracted by Hyundai in late 1999, was taken over in the spring 2000 by the Ofercontrolled company Zodiac Shipping, with a ten year charter to Hyundai. The activity has been very reduced in the 1,500 / 2,000 teu range. Strong charter rates, at least until the end of the year, may have played a role in dissuading owners to sell. Only four ships were reported sold in this category, including two resales of newbuidling contracts. A dozen of cellular-ships were reported changing hands in the 1,000 / 1,500 teu range, most deals were straight sales. In addition, four multipurpose ships of 23,500 dwt / 1,200 teu were sold. Generally speaking whilst the market substantially progressed all over the year 2000, the market reached a plateau in the summer, followed by a price softening for the medium/low size range. Nevertheless, it remained very difficult after the summer to trace charter-free quality ships in the large sizes (above 2,500 teu). It looks like most of the owners decided to keep their vessels, enjoying lower but still comfortable market rates. After the summer, unless the lines required immediate tonnage, the buyers became more selective or even preferred not to move, awaiting to see where the market was going. At the end of 2000 the market dropped, but we remain fully confident that the prices should pick up again as from summer or autumn 2001. 8 Shipping and Shipbuilding Markets 2001