Shipping Recovery Unlikely Until 2014, says CIMB
Chris Oliver, Jan. 30, 2012, 1:07 a.m. EST
HONG KONG (MarketWatch) -- The downward spiral underway in global commodity shipping rates won't improve much until 2014, when a better balance between new capacity and demand should clear the decks for a modest recovery, according to CIMB research in Hong Kong. In spite of record ship deliveries in 2011, the number of cargo vessels under construction is equivalent to about one-third of the existing global fleet, CIMB's Hong Kong-based analysts said on Monday. There's little that shipping lines can do to improve the situation in the short term, CIMB said, adding that they did "not expect a huge volume of demolitions, given the relatively young fleet."
In a related development, Japanese shipping line Mitsui O.S.K. Lines Ltd. the world's biggest operator of crude-oil supertankers by vessel number -- will scrap five large tankers, saving an estimated at $20,000 to $30,000 a day per tanker to idle the vessels, according to a report Monday by the Nikkei newspaper. The shipping line said it didn't want to sell the vessels, as such a move would do little to ease the overcapacity problem.
