Friday, 26 October 12 SHIPPING MARKETS HEADING FOR DIVISION AND MULTI-TIER WILL BECOME THE NORM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
It seems that something is expected to be fundamentally different in the way that the shipping markets will be operating in the future, according to shipbrokers. While the tanker market is no stranger to the concept of a 2 Tier market, where some segments are performing much better than others, dry bulk and container trades weren't used to such diversification. This is about to change according to a recent Intermodal report, which suggest that in the container side, the new, wider, slower and more efficient vessels will soon be in the water with owners expecting to see the premiums rolling in, as promised/speculated by charterers.
According to Intermodal's Timos Papadimitriou, "on the dry side, this idea has been incubating since last year and now Cargill is stepping up and endorsing the more efficient vessels. It is only logical to expect more charters will follow and become pickier. And why not? Fuel is not getting any cheaper and there is an abundance of vessels. But does that justify more orders? Will the improvement in a few mts of bunkers be translated into a premium on the hires? he asks.
Furthering his argument, Papadimitriou notes that "in containers, the new vessels burn less fuel and are significantly slower, producing huge savings and yes that will result to a premium. But in the bulk side how much slower can a vessel sail. From 14,5kn to 13kn? 12kn? 11kn? Eco ships do burn less on paper but still nowhere near the percentage saving performance of their container counterparts. So will the dry cargo charterers pay a premium? It’s doubtful. Charterers have always been looking for effective and efficient ships, no big news there. However, with so many ships falling in the water and so many yet to come they are standing in front of an “all you can eat” buffet ready to pick and choose what suits them best" he said.
Moving on to the market movements in terms of new investment, the shipbroker's report mentioned that in the sale and purchasing business for used vessels, "last month we saw a number of 5 to 7 year old Panamax, Kamsarmax and Supras surfacing in the market and being welcomed by a lot of curious parties but a world apart from the sellers’ price ideas.
Germany continues its steady supply of containers vessels on sizes below 3000 TEU, with most sales candidates having the blessing from the banks. It’s interesting to see if the older than 1998 built vessels will find a new home or head to the beaches. Last but not least, in the tankers we saw mid 90’s VLs and MRs ruling the second hand stage" the report said.
On the new building front, Intermodal added that "those who can, won’t order (thank God), mostly strictly out of principle of not putting more vessels into the already swamped traditional size segments, and those who want to order can’t (thanks to the banks). Yet still there are owners thinking and looking outside of the boundaries at sizes not yet fully exploited, like that of the dry bulk Ultramax or in forgotten segments of the tanker market, like the under ordered LR1 and LR2 sizes. In containers, the falling NB prices in combination with the global economic sentiment is giving a reminder that in the game of economies of scale, size “Does” matter, making the phrase “bigger is better” the main sales pitch".
Concluding its argument, the shipbroker wondered as to what should one do in times of uncertainty and speculation. "Wait for really modern ships to come up for sale and purchase them in levels that reflect the hire market and the market outlook in general, or invest in new sizes and under ordered segments and thrive in uncharted waters? I am sure that a shipowner will find a third and fourth alternative" it concluded ratherr playfully. Source: Nikos Roussanoglou, Hellenic Shipping News
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