Things are looking up – if you have the cash

Despite the pressure of increased environmental compliance, 2010 will be a good year for anyone in the shipping industry with cash and access to finance, said shipping accountant and adviser Moore Stephens.

Julian Wilkinson, head of the Moore Stephens Shipping Industry Group, said: “For the first time in a decade, shipping bankers can get a decent and certain return on their dollar. Credit is restricted, loan pricing is up strongly and no banker now has to look for an excuse to turn away marginal business.

"Stronger clients and higher margins point towards happier bankers, even more so where the banks foreclose on the weakest borrowers.”

He added the shipyards are using the shortage of credit to push back delivery dates and renegotiate contracts – although the effect is less pronounced in China.

“Most shipowners, meanwhile, expect tough markets for the next year. But a growing global economy, booming scrapping and a fast-diminishing orderbook-overhang may mean that the markets will be less tough than expected. Combine that with record low global interest rates, and things don’t look too bad for owners who are not over-extended,” he concludes.

(Source: Port Strategy)