Higher oil costs will boost 'capacity-absorbing slow steaming'

FUEL price increases stand to help shipowners further to reduce excess capacity by encouraging slow steaming, says Paris-based Alphaliner.

The consultancy now expects that if fuel prices climb above US$450 per ton to $650, this could bring the containership supply and demand to an equilibrium earlier than expected.

But Alphaliner also warned that oil prices at $100 per barrel or higher would have an "adverse impact on the global economy. This may lead to a slower demand growth as world trade volumes fall, which could offset the positive impact of high fuel prices on the idle containership fleet."

Alphaliner added that total expected deliveries in 2010 currently stand at 415 ships for 1.833 million TEU, which it said represents a "14 per cent increase from the fleet expected at the end of 2009."

On the other hand, the newsletter could not rule out that more orders could be deferred and that some small vessels planned for delivery in 2010 or 2011 may not be built.

Source: www.schednet.com