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Market Analysis
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19
Levent Akson
D
arwin , quotes the following
words of Aristo at the begin-
ning of his masterpiece The
Origin Of Species “Rain does
not fall to grow the corn, the corn grows
because rain falls down”. The shipping
sector which had a good rainy period
between 2003 / 2008 is having a hard time
to understand today’s drought and the fact
that “if you mess with
the balance of natüre,
you have to live with
its results”. There is
more vessel supply
than demand in the
Market. We have to
live with the results.
Many sea inves-
tors will defend them-
selves saying ‘’Why
am I condemned! Was
it me who bought
such many vessels?!”
, but we must never
forget this: ‘’In the
current global capital-
ist system, you must
be ready for the mane-
ouvers of the stronger,
if not, very sorry, you
are too late”
It is not easy to
write about Economy,
thus, harder to write about Sea Economy.
When I first started to write about Sea
Economy, a journalist friend gave me two
advices; do not reflect your expectations
in your essays and say a lot but don’t say
anything.
When I sat down to write this essay
as a shipping investor who is more than
enough aware of the current situation of
the Shipping Market, I tried my best to
not reflect my expectations. But I will dis-
regard my journalist friend’s advise now
because I want to point out some things
more clearly.
Yes, we can explain the current situ-
ation of the shipping market as follows:
The Sea Inverstors played a very bad
soccer game for 80 minutes and conceded
goals, but they played well for the last 10
minutes. Unfortunately playing the game
well for last 10 minutes will not change
the score and the Sea Investors will leave
the field defeated. You may ask, “what
will they do next?” After the game ends,
they will switch the channel and will try
to hear some nice comments from Rıdvan
Dilmen, such as “they played very well
for the last 10 minutes” etc… They will
perk up their ears to hear what the com-
mentators are saying about the game but
they will never be able to change the
game’s score.
So, what positive steps did the Sea
Investors take in these last 10 minutes?
-Did they stop investing on New
Building Vessels?
-Mostly, yes.
-Did the number of scrappings increase
significantly?
-Yes.
-Did they slowed the speed down to
reduce the bunker expenses?
-Yes. Especially containers and tankers.
-Did the number of Laid-up vessels
increase?
-Yes.
Other than the abovei do the sea
investors have another card to play?
Unfortunately not. So, what was the big-
gest mistake in the first 80 minutes of the
game?
-Frantically ordering for new vessels.
Yes, this ordering frenzy was at such an
extent that between 2008/2012 the supply
of new vessels increased % 36 although
the demand for sea transport increased
only % 16. If we say in other words,
currently there is % 20 vessel surplus at
shipping market and this is where the
base of the problem lies. Although the
sea investors played their cards right fort
he moment, they are too late and the new
building orders created an oversupply.
What will happen next?
The mosted asked question by Sea
Ivestors: what will happen next?
Nothing will happen,the Companies
who have financial strength, who are free
of bank debts,mortgages, who can mini-
mise their operation costs without affect-
ing their service quality will continue to
survive.
Maybe, in a very near future, the
meaning of “Owner” will change and we
will come face to face with banks, stock
market organisations rather than a person.
Who knows?
n
Good, but late soccer...
The Sea
Inverstors played
a very bad
soccer game for
80 minutes and
conceded goals,
but they played
well for the last
10 minutes.
Unfortunately
playing the game
well for last 10
minutes will
not change the
score and the Sea
Investors will
leave the field
defeated.