Uncertainty still reigns true in the global shipbuilding
sector with many factors influencing either a return to ordering
activity or a continuation of the reduction in interest in newbuildings.“The best case scenario for shipbuilders is for ship finance
liquidity to return and for a cut in Chinese overcapacity. There needs
to be renewed interest in eco-designs and ships with options such as LNG or Ballast Water Treatment Systems and then possibly any increased
demand will support pricing from the shipyards’ point of view,” said Mark Williams, Research Director at Braemar Seascope.The worst case scenario is for a continuation in the global credit
crunch; weak freight markets continuing to suppress newbuilding demand;
input costs and forex turning against the builders; the low point in the contracting cycle extending and also more cash flow problems and
failures.“Investors are unlikely to invest in new tonnage this year
without a fair prospect of economic return even if there is a short term recovery in freight markets, with many believing more needs to be done
to encourage a return in confidence in the newbuilding sector,” Mr Williams told delegates attending the latest Marine Money conference.While higher scrap prices should encourage owners to renew their
fleets, the ongoing credit crunch and weak freight markets are reducing
the economic life of today’s ships, which are now depreciating to scrap
value in their teenage years or early twenties.Mark Williams said that newbuilding prices tended to follow demand
with input costs only providing a floor which can be broken through. “When the global shipbuilding backlog is less than about 18 months, yards
tend to cut prices for competitive advantage, however prices appear to
be bottoming out. There is far too much shipbuilding capacity out there. 2012 was the peak delivery year since the mid-1970s. So it is a
question of who will blink first.”
SHIPBUILDING
29 January 2013 - 21:00
UK: Uncertainty Reigns in Newbuilding Sector, Says Braemar Seascope
Uncertainty still reigns true in the global shipbuilding sector with many factors influencing
SHIPBUILDING
29 January 2013 - 21:00
This news 7143 hits received.
These news may also interest you