|
|
HALF-FULL OR HALF-EMPTY
In the course of 2009, a year which will be long remembered,
hope finally replaced fear - a fear born of the
unknown and the uncontrollable. The year started under
the worst auspices, with a non-existent freight market
(except in the tanker sector), a complete absence of
vessel sales, plummeting economic consumption affecting
the containership sector and, finally, a paralysed financial
market totally dependent on the goodwill of international regulatory
bodies and government policies. “After a long period
of celebration, the wake-up call was particularly painful.”
But in the course of the second half of the year, the market regained
its colour. The banking system avoided collapse, money
began circulating - sparingly but at historically low interest rates
- and China made the most of the general disorder and the
success of its stimulus plan to regain its health. The compass
needle stopped twitching, the market found its fundamentals,
and the shipping industry began to regulate itself again, as is
common in any cyclical market.
Thanks to cancellations and delayed deliveries, new vessels
were less than expected and the fleet increased by only 7% in
2009, against a decline in seaborne trade of 3%. Demolitions
reached 36m dwt – taking us back to the records seen in the
1980s – while oil storage immobilised 6% of the tanker fleet,
permitting the market, with the help of a harsh winter, to
achieve higher rates by the end of the year. In the containership
market, with around 10% of the fleet in lay-up, and with the
introduction of slow steaming plus a series of tariff increases,
the cost of transporting a box between Asia and Europe reached
a level by year-end that no one would have expected at the
start of the year. As for the dry bulk market, rates were kept afloat
by the immense needs of China which increased its imports by
more than 270m tonnes in 2009 thanks to an insatiable demand
for iron ore (+45%) and coal (+300%).
The second hand market was also again busy, with a total
number of transactions ultimately similar to 2008, although
with an average price of 40% to 50% less.
Good news then? Yes, but… newbuilding deferrals will only
postpone the problem of overcapacity, and the market must
still absorb close to 40% of the existing fleet over the next three
years (65% for the large bulkers). Faced with an economic recovery
that most experts qualify as “soft”, these ships will long
weigh on the market and its return to equilibrium. Furthermore,
it is estimated there are $150bn of newbuilding contracts not
yet financed, out of a total orderbook worth $450bn.
The current price of new and second hand ships should allow
more healthy economic calculations, and raise hopes of increased
activity in the shipbuilding industry. However those
vessels ordered or purchased at excessive prices are here to
stay, and will penalise heavily the profit and loss accounts of
some shipowners.
And the winner is… China, which is not reducing its newbuilding
capacity and which in 2009 became the largest buyer
of second hand tonnage ahead of Greece. China will be able
to build a fleet at moderate prices – as Japan did 30 years
ago – and thus better control the transport of the manufactured
goods and raw materials that its industry so needs.
Meanwhile the crisis will accelerate the shift of the global centre
of gravity towards Asia, an irreversible change that will inevitably
reduce the maritime power of the western countries.
In conclusion, the recession is perhaps behind us, but we are
still recovering and a relapse is yet possible, a situation which
is going to create strong volatility in the shipping markets. This
in turn offers opportunities to those with the means to seize
them. Nevertheless it is certain that, unlike some other industries,
shipping’s future is not threatened by any technological
revolution and the maritime industry remains the backbone of
international trade.
Certainly it may undergo a change of ownership… but isn’t
that the nature of the capitalist system?
|
