Monday, September 30, 2013

Shipping industry not out of danger yet: Analyst

Despite hopes that global trade levels are recovering, it could take some time for the shipping industry's chronic overcapacity to improve, an industry expert warned.

The shipping industry has been through rough waters during the economic crisis, with a decline in global demand resulting in a substantial capacity glut – especially on the Asia-Europe route. This hit the shipping lines' revenue hard: the Baltic Dry Index (BDI) -- which tracks day freight rates for dry bulk shippers – fell to a 26-year low in 2012.

However, this year has seen signs of a recovery on the back of global economies returning slowly to growth, rising consumer confidence and a rebound in Chinese commodity demand. As such, the BDI has risen almost 200 percent this year.


Richard Meade, editor of the maritime industry newspaper Lloyd's List, told CNBC that a return to the supply-demand balance in the global shipping industry would be a slow process, however, warning that there were still "unknowns" facing the industry.

"There is general consensus in the market now that we have reached the bottom -- if you look at asset values in terms of the ships we're at record lows here – and I think people are going to be looking to consolidate, find operational efficiencies and move into the up cycle," Meade told CNBC Europe's "Squawk Box" on Monday.

"[However] the shipping market generally is besieged by overcapacity and the container market, in particular, is still trying to churn out the ships that it ordered two or three years ago."

Despite Meade's concerns, the shipping industry appears ebullient. On the back of rising economic optimism – as growth returns to the euro zone in particular -- the world's largest shipping group Moller Maersk, which carries 15 percent of all seaborne containers, called the bottom of the global trade cycle last week

Speaking to investors and analysts in Copenhagen last Thursday, the company's chief financial officer, Jakob Stausholm, predicted that the world would emerge from the downturn in the next two years and that the demand for global containers would grow by 4 to 6 per cent in 2014 and 2015, up from recent forecasts of 2-3 per cent for this year.

Shipping companies like Moeller Maersk were affected during the downturn as they had ordered new container ships when the industry was booming.

Meade said the industry was seeing the "last remnants" of over-ordering "but we're still in a situation where there's still too much tonnage for not enough trade."

As such, indications that freight rates were going up, as seen on the Baltic Dry Index, could be misleading, he said. "The BDI is indicative of the dry bulk market not the containerized market…Shipping generally is very much a case of a lot of different sectors and a lot of different market fundamentals here so dry bulk market going up is indicative of certain trends going up but not of the whole industry."

Some shipping companies have reduced speeds -- and thereby fuel consumption -- to cope with the drop in freight rates over the last few years. But as demand picks up, Meade fears the industry could see container ships speed up , "flooding" capacity back in to the industry.

Concerns over freight rates or a shaky demand picture do not seem to have perturbed Maersk, however, which launched the world's biggest container ship on Friday.

Named the Maersk McKinney Moller, the ship consumes 35 percent less fuel and has 16 percent more capacity than the company's previously largest vessel and is part of its Asia-Europe route. The container ship can carry the equivalent of up to 180 million iPads or 111 million pairs of shoes in a single journey from Shanghai to Rotterdam.

The ship signals an attempt by Maersk to increase efficiency and comes as the company is attempting to increase its profitability by forging an operational alliance two of its two biggest rivals, Mediterranean Shipping Company and CMA CGM, on a number of sea routes.

Calling the alliance a "pretty clever" plan, Meade said it reflected hopes in the industry that increasing demand would solve the problem of overcapacity. "I don't think anyone's pretending that the container industry is earning great rates at the moment. This is really an operation to try and reduce the volatility in the market."


Source/Extract/Excerpts/来源/转贴/摘录: CNBC
Publish date:30/9/13

No comments:

Post a Comment

Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)
“错过时机”胜于“搞错对象”:不会全军覆没!”
做自己熟悉的事,等到发现大好机会才投钱下去

乔治·索罗斯(George Soros)

“犯错误并没有什么好羞耻的,只有知错不改才是耻辱。”

如果操作过量,即使对市场判断正确,仍会一败涂地。

李驰(中国巴菲特)
高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo


There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
冷眼(冯时能)投资概念
“买股票就是买公司的股份,买股份就是与陌生人合股做生意”。
合股做生意,则公司股份的业绩高于一切,而股票的价值决定于盈利。
价值是本,价格是末,故公司比股市重要百倍。
曹仁超-香港股神/港股明灯
1.有智慧,不如趁势
2.止损不止盈
成功者所以成功,是因为不怕失败!失败者所以失败,是失败后不再尝试!
曾淵滄-散户明灯
每逢灾难就是机会,而是在灾难发生时贱价买股票,然后放在一边,耐性地等灾难结束
  • Selected Indexes 52 week range

  • Margin of Safety

    Investment Clock

    World's First Interactive Investment Clock