Figures released by the International Maritime Bureau (IMB) in its 2005 Annual Report on Piracy Against Ships have shown a significant drop in the number of pirate attacks in the Malacca Straits, down from 38 in 2004 to only 12 attacks in 2005.

These are the lowest figures in seven years. The report specifically highlighted the effect that enforcement agencies, mainly from Indonesia and Malaysia, have had during the period. However, the after-effects of the tsunami in December 2004 are also considered to be a factor for the low number of pirate attacks in the first half of 2005.

The reduced number of attacks has put pressure on Lloyd's Market Association (LMA) to delist Malacca Straits as a war-risk area that was imposed last June following a decision by the Association's Joint War Committee (JWC). Furthermore, just a few weeks ago, the JWC decided that the region should remain as a war-risk area for the time being.

An official for LMA, which advises members of Lloyd's on risk said, "We have received representations from industry bodies and we do understand the situation is improving. Because of this we are keeping a close eye on the strait, but these are early days and we are constantly reviewing the areas that are identified as war zones, including the strait."

Despite the optimistic trend for the Malacca Straits, the IMB remains concerned about an increase of piracy in other hot spots, namely Somalia, Iraq and Tanzania. The coast of Vietnam also shows a worrying increase of activity and in its report the bureau cautioned the international shipping industry against lowering its guard.

Newbuild prices begin to curb orders

According to Clarkson, the world's biggest shipbroker, the value of newbuilding orders for 2005 was 6.3 per cent less than the previous year, as record prices curbed orders for container ships, dry-bulk carriers and tankers.

Clarkson's monthly World Shipyard Monitor Report said that 1,991 vessels of 75 million dwt, worth $71.5 billion, were contracted last year, 28 per cent less by capacity than in 2004. Furthermore, in 2004, which was a record year, shipowners had spent a record $76.3 billion on renewing their fleets.

Last year, all the major shipbuilders charged record prices to keep pace with the soaring cost of steel plate that rose to its highest level at around $757 a tonne. This, according to Clarkson, together with the industry boom, has caused about $207 billion to be invested in new carriers in the past three years the same amount spent in the preceding 10 years.

Moreover, according to the broker, with the major yards sitting on order books of three years or more, it is hard to see much short-term weakness in newbuilding prices.

Hyundai Heavy Industries of South Korea said recently that it expected to receive contracts, including those for building ships, worth $13 billion in 2006, less than the $15.9 billion that it won in orders in 2005 and Daewoo Shipbuilding said that it expected $10 billion worth of orders this year.

Clarkson's report went on to say that oil and gas tankers worth $32.7 billion were ordered last year and $30.5 billion and $12.2 billion was spent on container ships and dry-bulk vessels respectively.

Clarkson estimates that the price paid for a two-million barrel (VLCC) oil tanker, rose to a record $130 million in 2005 while for the largest of the dry-bulk vessels (Capesizes) prices rose to an all-time high of $68 million. The price of a 6,200-TEU container ship reached a record $105 million.

South Korean yards report record year

According to Asia Pulse/Yonhap, South Korean shipbuilders enjoyed a record year in 2005, receiving the largest amount of orders in the world. Domestic ship builders received combined orders of 14.5 million compensated gross tonnes (CGT) in 2005, almost twice as much as the European Union, ranked second with 8.5 million CGT. The runners-up were China with 7 million CGT and Japan with 6.2 million CGT.

Despite the industry's downturn, South Korean ship builders' global market share expanded last year to 38 per cent, up from 36 per cent a year earlier. At the end of last year, domestic shipbuilders had a combined order backlog of 39.7 million tonnes, breaking the 30-million-tonne level for the second consecutive year. South Korean shipbuilders were also top in the tonnage of ships built, with 9.7 million CGT, or 36 per cent of the world's total.

High court allows GE demerger

The Bombay High Court has approved the demerger of the offshore business of Great Eastern Shipping Co. Ltd (GE Shipping) into a separate new company, according to Exim. The board of directors of GE Shipping had, in principle, decided to restructure its businesses (shipping and offshore oilfield services) to harness their full potential, company sources said.

The restructuring envisages the demerger of the entire offshore business consisting of drilling services, marine logistics, marine construction and port and terminal services.

New ships for NSCSA and Q-Ship

The National Shipping Company of Saudi Arabia (NSCSA) is to buy at least nine very large crude carriers (VLCCs) and eight chemical tankers according to UPI, under a five-year acquisition programme. All the vessels being acquired, whether new or used, will be double-hulled. National Shipping currently has nine double-hulled crude carriers, nine chemical tankers, and four multi-purpose roll-on-roll-off ships in service.

Meanwhile, the Qatar Shipping Co (Q-Ship) recently took delivery of its fourth new tanker from a series of six 105,000 deadweight (dwt) vessels that will be used to transport petroleum and are part of the Q-Ship fleet expansion programme.

Ranjit Singh, technical manager of Q-Ship, accepted the MT Umlma at a ceremony at the Hyundai Shipyard at Busan, South Korea.

- The writer is a Dubai-based marine consultant.