Caution tempers optimism as order books fill

A SPENDING spree is expected in 2011 as Asian carriers, fresh from a year of scrapping, order new ships as slow steaming absorbs capacity, Hanjin CEO Kim Young Min told Cosco's World Shipping Summit in Guangzhou.

Korea's Hanjin Shipping is in the market for mid-sized containerships because volume is expected to increase eight per cent on returning demand from US and Europe in the next year, said Mr Kim.

Bloomberg noted that Taiwan's Evergreen has 10 ships on order as part of 100 with some in the 8,000 TEU class to add to its coming fleet of 20 same-size vessels worth US$2 billion ordered from Samsung Heavy Industries in June and Singapore's NOL has 12 on order from Daewoo.

Yet a note of caution came from Tokyo's Value Search Asset Management president Minoru Matsuno who warned conference delegates: "The industry needs to ensure it doesn't repeat the overcapacity mistakes that helped hammer rates last year."

Cosco chairman Wei Jiafu agreed the shipping market is "roaring", but also said a "more rational mentality" is essential to avoid flooding the market with capacity and pushing down rates.
(Source:www.schednet.com)