A series of extraneous factors
such as disaster in Japan, North African conflict and Middle East, but also inherent “weaknesses” such as oversupply of oceangoing vessels will determine the course of shipping until 2013, according to the Hellenic Shipbrokers Association.
“We are optimistic because we expect the market to remain stable”, said the association’s vice president Thomas Pagonis, adding that a new “bubble” is not expected soon and shipping will no longer characterized as a high-risk investment.
The oversupply of ships will be the biggest concern for the next two years, according to the president of the association, Yannis Pachoulis, as the new vessels will represent the 60% of current operating fleet.
The problem is compounded by the reduced shiploads, as worldwide growth remains low and markets area affected by Japanese disaster and unrest in North Africa, said the president. However, he estimated that the market would move at low but stable levels.
The increasing withdrawals of old ships would stabilize the supply and demand of affreightments, but despite the fact that scrap prices move upwards, ship-owners do not destruct ships.
The shipbrokers characterized this attitude as reasonable to some extent as the old ships are free of loans, thus generating higher net profit than new vessels that carry debt burdens. Commenting on the rally in prices of goods and raw materials, they noted that a balance would come until 2013, because of the growth of countries of Southeast Asia and China and Japanese needs for reconstruction.
"Until then the prices of raw materials will increase. As soon as the stabilize, shipping will be stabilized too," according to Yannis Pachoulis.
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