WORLD DD & REPAIR MARKET REPORT

MARCH 2016

OSMAN KAYA TURAN Istanbul Turkey

www.osmankayaturan.blogspot.com

http://twitter.com/Okturan

Acknowledgements We contacted key players in the international shipyard & shipping markets in the first week of April 2016, asking them to complete a short questionnaire so that they could share their information and views with us. We are extremely grateful to all those who responded. We believe our respondents represent a cross-section of the industry and, therefore, our monthly report is a good representation of the worldwide docking and repair industry with some comments also on shipping as a whole, but it is not possible to guarantee that this is the case. Therefore, whilst every care has been taken in the production of this study, no liability can be accepted for any loss incurred in any way whatsoever by any. You may also contact with us for the next issue and share your comments as our respondent!

MARCH 2016

Page 1

© 2016 Osman Kaya Turan

Introduction and Executive Summary Main considerations for selecting a yard are trading area, offered prices, time offered, quality approach of the yard, shipyard experience and track records, safety records, local infrastructure, financial situation, weather/season of the area and etc. However, from the other aspect, every docking decision starts with the successful employment of the vessel and owners’ interest to continue the vessel’s operations subject to market conditions and his financial capability. According to the area, the yards have a bit different characteristics, mentality and business pattern and knowing the market will gather a great advantage to the owners. Furthermore, since there are many shipyards worldwide offering their capacity, the main critical issue will always be the right selection of the yard for the best repair in a good price, quality and time of deliveries. From the yard aspect, our respondents view the tanker markets or chemical tanker sector, which is one of shipping’s healthiest markets. As well known, the dry cargo market has more opportunities to make money, and control risk, than any other sector of shipping, however spot trading vessels are having very difficulties nowadays. The main question isn’t if the market will turn, the question is when. Today’s situation may be frustrating – even paradoxical in conventional market economic terms. But for the long-term health of the industry, perhaps it is actually a better place to be. But whether in success or failure of the global economy, understanding the capabilities, facilities and experience of the yards is vital to making informed choices in any docking & repair, also the same for newbuildings. Whatever the pace or direction of development, our commitment to you and to our yards will continue and we remain ready to support you. In the following pages, you will find the summary of the market according to the yard areas and mainly indicates the continued decrease in the prices. The price changes represent the fluctuations in the market, not covers fleet agreements or frame agreements which are generally better side and terms already. Please do not hesitate to contact us for your questions on world shipyards and their updated information.

MARCH 2016

Page 2

© 2016 Osman Kaya Turan

Table of Contents

Page

Acknowledgements Introduction and Executive Summary Market Summary Western Mediterranean & South Europe North-Western Europe America Far East inc. China Persian Gulf West Africa Eastern Mediterranean Turkey & Black Sea World (Based on dock capacities and volumes)

MARCH 2016

Page 3

1 2 4 6 8 10 12 14 16 18 20

© 2016 Osman Kaya Turan

AREA

Western Mediterranean & South Europe

WORK ACTIVITY LEVELS GENERAL SERVICES DOCKING & UNDOCKING ANCHORS / ANODES / SEA CHESTS & VALVES TAIL SHAFT & PROPELLER AND RUDDER HULL AND HOLDS/TANK TREATMENT STEELWORK / STAGING PIPING RENEWAL MECHANICAL / ELECTRICAL MISCELLANEOUS JOBS TANK CLEANING WORKS STAGING WORKS

NORMAL NORMAL HIGH NORMAL LOW NORMAL LOW HIGH NORMAL NORMAL LOW

CHANGE IN PRICES (%) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

Market Situation (During the last month) Small sized docks commented as "good" when bigger yards are voted as "bad". Market forecast for this month As per similar above, small sized docks are more hopeful than bigger docks again.

MARCH 2016

Page 4

© 2016 Osman Kaya Turan

Last month market trends & business opportunities/treats (if any) i.e. WBT, bankruptcies, strikes etc. Lower activities continued as expected in last March. Many shipowners postponed DD & Repairs. This month market prospects & business opportunities/treats (if any) i.e. WBT, bankruptcies, strikes etc. Expectations for April are still low due to current shipping market conditions. What type of vessels mostly visited the yard(s) last month (If there is, indicate the reason)? Tankers, Bunkers, Passenger Vessels, Cruise Vessels and Superyachts What type of vessel owners are preferred in the current market (If possible, indicate the reason)? Mainly tanker or another type of international owners with good creditability.

MARCH 2016

Page 5

© 2016 Osman Kaya Turan

AREA

North-Western Europe

WORK ACTIVITY LEVELS GENERAL SERVICES DOCKING & UNDOCKING ANCHORS / ANODES / SEA CHESTS & VALVES TAIL SHAFT & PROPELLER AND RUDDER HULL AND HOLDS/TANK TREATMENT STEELWORK / STAGING PIPING RENEWAL MECHANICAL / ELECTRICAL MISCELLANEOUS JOBS TANK CLEANING WORKS STAGING WORKS

NORMAL NORMAL HIGH HIGH LOW NORMAL LOW HIGH NORMAL NORMAL LOW

CHANGE IN PRICES (%) 0% -1% -2% -3% -4% -5%

-5%

-5%

-5%

-5%

-5%

-5%

-5%

-5%

-5%

-5%

-5%

-6%

Market Situation (During the last month) General comments are as "bad". Market forecast for this month General comments are as "bad". MARCH 2016

Page 6

© 2016 Osman Kaya Turan

Last month market trends & business opportunities/treats (if any) i.e. WBT, bankruptcies, strikes etc. Mainly local owners visited the yards. This month market prospects & business opportunities/treats (if any) i.e. WBT, bankruptcies, strikes etc. Waiting for the recovery of the offshore industry. What type of vessels mostly visited the yard(s) last month (If there is, indicate the reason)? Local owners

MARCH 2016

Page 7

© 2016 Osman Kaya Turan

AREA

America

WORK ACTIVITY LEVELS GENERAL SERVICES DOCKING & UNDOCKING ANCHORS / ANODES / SEA CHESTS & VALVES TAIL SHAFT & PROPELLER AND RUDDER HULL AND HOLDS/TANK TREATMENT STEELWORK / STAGING PIPING RENEWAL MECHANICAL / ELECTRICAL MISCELLANEOUS JOBS TANK CLEANING WORKS STAGING WORKS

HIGH HIGH NORMAL NORMAL LOW HIGH LOW NORMAL HIGH NORMAL LOW

CHANGE IN PRICES (%) 0% -1% -2% -3% -4% -5% -6%

-6%

-6%

-6%

-6%

-6%

-6%

-6%

-6%

-6%

-6%

-6%

-7%

Market Situation (During the last month) Indicates bad market conditions. Market forecast for this month Expected average market. MARCH 2016

Page 8

© 2016 Osman Kaya Turan

Last month market trends & business opportunities/treats (if any) i.e. WBT, bankruptcies, strikes etc. Vessels are having trouble to reach the agreed docking dates. Commercial delays seem more common and layups considered worldwide. What type of vessel owners are preferred in the current market (If possible, indicate the reason)? Tankers, as they seem to have lucrative charters in America. Further comments or evaluation for the last month (If any) or other By far, the worst month the yards have had in the past 4 years.

MARCH 2016

Page 9

© 2016 Osman Kaya Turan

AREA

Far East inc. China

WORK ACTIVITY LEVELS GENERAL SERVICES DOCKING & UNDOCKING ANCHORS / ANODES / SEA CHESTS & VALVES TAIL SHAFT & PROPELLER AND RUDDER HULL AND HOLDS/TANK TREATMENT STEELWORK / STAGING PIPING RENEWAL MECHANICAL / ELECTRICAL MISCELLANEOUS JOBS TANK CLEANING WORKS STAGING WORKS

HIGH HIGH NORMAL NORMAL HIGH NORMAL LOW HIGH HIGH HIGH NORMAL

CHANGE IN PRICES (%) 0% -2% -4% -5%

-6% -8%

-8%

-10%

-8%

-8%

-8%

-9%

-9%

-9% -10%

-10%

-12% -14% -16%

-15%

Market Situation (During the last month) Although “bad” market reported from some channels, common evaluation is based on “average” market conditions. Market forecast for this month Average MARCH 2016

Page 10

© 2016 Osman Kaya Turan

What type of vessels mostly visited the yard(s) last month (If there is, indicate the reason)? Cruiser, container ships, tankers and bulk carriers

MARCH 2016

Page 11

© 2016 Osman Kaya Turan

AREA

Persian Gulf

WORK ACTIVITY LEVELS GENERAL SERVICES DOCKING & UNDOCKING ANCHORS / ANODES / SEA CHESTS & VALVES TAIL SHAFT & PROPELLER AND RUDDER HULL AND HOLDS/TANK TREATMENT STEELWORK / STAGING PIPING RENEWAL MECHANICAL / ELECTRICAL MISCELLANEOUS JOBS TANK CLEANING WORKS STAGING WORKS

HIGH HIGH HIGH NORMAL HIGH HIGH LOW NORMAL NORMAL HIGH HIGH

CHANGE IN PRICES (%) 0% -2% -4% -6% -8% -10%

-10%

-10%

-10%

-10%

-10%

-10%

-10%

-10%

-10%

-10%

-10%

-12%

Reason(s) of change: Reduced fleet and increased competition Market Situation (During the last month) Some yards reported as good but there are also bad market reviews.

MARCH 2016

Page 12

© 2016 Osman Kaya Turan

Market forecast for this month Good Last month market trends & business opportunities/treats (if any) i.e. WBT, bankruptcies, strikes etc. Idle fleet has increased significantly especially in offshore sector. What type of vessels mostly visited the yard(s) last month (If there is, indicate the reason)? Tankers, Bulkers, Naval Vessels and in house fleet / Anchor handling tugs, Offshore support vessels, Dredgers, Barges, Tugs, Crew Boat, Jack up Rigs and Jack up Barges What type of vessel owners are preferred in the current market (If possible, indicate the reason)? Tier 1 players due to payment assurances / Jack up Rigs, Platforms Maintenance, Military Vessels, Dredgers, Barges, Fleet Performance (5 years services on large jobs) and major fabrication projects

MARCH 2016

Page 13

© 2016 Osman Kaya Turan

AREA

West Africa

WORK ACTIVITY LEVELS GENERAL SERVICES DOCKING & UNDOCKING ANCHORS / ANODES / SEA CHESTS & VALVES TAIL SHAFT & PROPELLER AND RUDDER HULL AND HOLDS/TANK TREATMENT STEELWORK / STAGING PIPING RENEWAL MECHANICAL / ELECTRICAL MISCELLANEOUS JOBS TANK CLEANING WORKS STAGING WORKS

NORMAL NORMAL NORMAL NORMAL NORMAL NORMAL NORMAL NORMAL NORMAL NORMAL NORMAL

CHANGE IN PRICES (%) 0%

-2%

-4%

-6%

-5%

-5%

-8%

-8%

-8%

-5%

-5%

-8% -9%

-10%

-12%

-5%

-9%

-11%

Reason(s) of change: Market & exchange rates Market Situation (During the last month) Average MARCH 2016

Page 14

© 2016 Osman Kaya Turan

Market forecast for this month Average Last month market trends & business opportunities/treats (if any) i.e. WBT, bankruptcies, strikes etc. The severe market slowdown that the yards have experience along with the rest of the oil service industry on account of the collapse in oil prices that has persisted for about 15 months now. The downturn continues with more and more vessels been laid up. They have experienced a reduction of 60% in our yard activities since November 2015. This month market prospects & business opportunities/treats (if any) i.e. WBT, bankruptcies, strikes etc. Effects of the downturn continues. What type of vessels mostly visited the yard(s) last month (If there is, indicate the reason)? OSV, AHT, Harbour Tugs, Container, Tanker, Barges, Fishing, crew boats Further comments or evaluation for the last month (If any) or other As summarised by one successful yard strategically located in the region, servicing shipping routes and oil & gas industries, they will have to become less dependent on their core market (OSV’s etc.) and invest in catering for different markets in order to remain sustainable; a strategy which they have employed since the slowdown in the industries. The market for OSV’s is challenging worldwide. Numerous vessels have been laid up as from end 2015. This situation is replicated by vessel owners throughout the world.

MARCH 2016

Page 15

© 2016 Osman Kaya Turan

AREA

Eastern Mediterranean

WORK ACTIVITY LEVELS GENERAL SERVICES DOCKING & UNDOCKING ANCHORS / ANODES / SEA CHESTS & VALVES TAIL SHAFT & PROPELLER AND RUDDER HULL AND HOLDS/TANK TREATMENT STEELWORK / STAGING PIPING RENEWAL MECHANICAL / ELECTRICAL MISCELLANEOUS JOBS TANK CLEANING WORKS STAGING WORKS

NORMAL HIGH HIGH LOW HIGH LOW LOW LOW LOW LOW LOW

CHANGE IN PRICES (%) 0%

0%

-2% -4% -5%

-6% -8% -10%

-8% -10%

-10%

-5%

-8%

-10%

-12%

-12%

-14% -15%

-16%

-15%

Reason(s) of change: Weak market and competition Market Situation (During the last month) Bad MARCH 2016

Page 16

© 2016 Osman Kaya Turan

Market forecast for this month Bad Last month market trends & business opportunities/treats (if any) i.e. WBT, bankruptcies, strikes etc. Stable or unplanned maintenances & repairs only This month market prospects & business opportunities/treats (if any) i.e. WBT, bankruptcies, strikes etc. Stable What type of vessels mostly visited the yard(s) last month (If there is, indicate the reason)? General cargo What type of vessel owners are preferred in the current market (If possible, indicate the reason)? No preference, only financially good status for the owners. Further comments or evaluation for the last month (If any) or other According to last year 2015, budgets and number of vessels lowered.

MARCH 2016

Page 17

© 2016 Osman Kaya Turan

AREA

Turkey & Black Sea

WORK ACTIVITY LEVELS GENERAL SERVICES DOCKING & UNDOCKING ANCHORS / ANODES / SEA CHESTS & VALVES TAIL SHAFT & PROPELLER AND RUDDER HULL AND HOLDS/TANK TREATMENT STEELWORK / STAGING PIPING RENEWAL MECHANICAL / ELECTRICAL MISCELLANEOUS JOBS TANK CLEANING WORKS STAGING WORKS

NORMAL NORMAL NORMAL NORMAL HIGH LOW LOW NORMAL NORMAL NORMAL LOW

CHANGE IN PRICES (%) 0% -1% -2% -3% -4% -5% -6% -7%

-7%

-7%

-7%

-7%

-7%

-7%

-7%

-7%

-7%

-7%

-7%

-8%

Reason(s) of change: Weak market Market Situation (During the last month) Both opinion for average and bad

MARCH 2016

Page 18

© 2016 Osman Kaya Turan

Market forecast for this month Both opinion for average and bad Last month market trends & business opportunities/treats (if any) i.e. WBT, bankruptcies, strikes etc. Many laid ups in dry cargo What type of vessels mostly visited the yard(s) last month (If there is, indicate the reason)? General Cargo and Bulkers mainly trading with time charter, Ro-ro and other type of vessels. What type of vessel owners are preferred in the current market (If possible, indicate the reason)? Special vessels, like dredgers, cable layers, tankers, time chartered Container & General Cargos. Further comments or evaluation for the last month (If any) or other Except some small size of bulkers, number of bulker vessel dockings are decreasing.

MARCH 2016

Page 19

© 2016 Osman Kaya Turan

AREA

World (Based on dock capacities and volumes)

WORK ACTIVITY LEVELS GENERAL SERVICES DOCKING & UNDOCKING ANCHORS / ANODES / SEA CHESTS & VALVES TAIL SHAFT & PROPELLER AND RUDDER HULL AND HOLDS/TANK TREATMENT STEELWORK / STAGING PIPING RENEWAL MECHANICAL / ELECTRICAL MISCELLANEOUS JOBS TANK CLEANING WORKS STAGING WORKS

HIGH HIGH NORMAL NORMAL NORMAL NORMAL LOW HIGH HIGH HIGH NORMAL

CHANGE IN PRICES (%) 0% -2% -4% -5%

-6% -8%

-7% -8%

-7%

-7%

-7%

-7%

-7% -8%

-8%

-10% -12%

MARCH 2016

-11%

Page 20

© 2016 Osman Kaya Turan

TURKISH & WORLDWIDE SHIPYARDS' REPRESENTATION (NEWBUILDINGS - DOCKING - REPAIRS – CONVERSIONS) SNP - VOYAGE AND PORT REPAIRS SHIP SUPPLY CHARTERING MANAGEMENT CONSULTANCY SERVICES BUSINESS DEVELOPMENT & MARKETING AGENCY

For articles and more information; please visit http://osmankayaturan-en.blogspot.com Facebook page: https://www.facebook.com/TurkishShipyardsRepresentation LinkedIn: https://tr.linkedin.com/in/osman-kaya-turan-18240116 Twitter URL: http://twitter.com/Okturan ISTANBUL TURKEY

MARCH 2016

Page 21

© 2016 Osman Kaya Turan