Shipping confidence steady, concern over newbuildings

The latest confidence survey from shipping accountant and consultancy firm Moore Stephens shows a negligible increase in confidence in shipping and ongoing concern over the glut of newbuildings due for delivery. The average confidence level expressed by respondents, on a scale of 1 to 10, was 5.5, compared to 5.4 in the previous survey in February this year. Owners, managers and charterers all exhibited a small increase in confidence in connection with the shipping markets in which they operate. Confidence among brokers, meanwhile, was marginally down, and the lowest among all categories of respondent. Geographically, the highest confidence level was recorded by respondents in Asia.

 

Comments generally reflected the downturn in economic markets worldwide. One respondent noted: "The volume of work is the same, but the payments are late, and that is what is killing us." But there was also some optimism, with another respondent commenting: "The shipping market will be stable until September, and then should slowly improve."

 

The most commonly recurring area of concern involved the newbuilding market. "The weight of the orderbook is a serious problem," commented one respondent, while another noted, "There is more toxic debt on the newbuilding front still to be revealed". Other comments included: "The glut in the newbuilding orderbook exerts strong downward pressure on confidence levels" and "We are doomed by the oversupply of ships".

 

Moore Stephens partner Richard Greiner said: "The high level of concern expressed by respondents about the effect that the glut of newbuildings may have on the market is not a great surprise. In a way, shipping is paying for the success it enjoyed in the boom years before the markets tumbled, on the basis of which it went on a shopping spree at the world’s shipyards. It is to be hoped that a continuing return of confidence and a resurgence in trade will be instrumental in dealing with a significant part of that glut, while the ingenuity and resources of shipping companies and their financiers will undoubtedly be needed to help ameliorate some of the other more pernicious consequences of an oversupply of tonnage."

 

(Source: Maritime Global Net)