With the biannual Posidonia Exhibition just a few days away, this year’s fair is expected to turn out one of the most critical one, in terms of sending out a message of optimism regarding both the Hellenic economy’s prospects, as well as shipping’s endurance through the downturn of the segment. In its latest report, shipbroker Intermodal said that this year’s Posidonia is opening under very different conditions, to what we left off two years ago and what has generally been accustomed by the industry this past decade.
According to Mr. George Lazaridis, “the extravagant parties of the past are no more, while many in the industry are more interested in focusing on the commercial survival of their vessels rather than celebrating the poor performance noted throughout the industry. What’s more is that the current political and economic turmoil in Hellas has left even the few well performing companies little reason to be celebrating. Being one of the strongest export oriented industries in the country, and provider of employment and much needed cash inflow for the Hellenic economy, this year’s exhibition could be what is needed to provide a scent of optimism both for shipping as well as the Hellenic economy” commented Mr. Lazaridis.
He continued by mentioning that “having said that, it is interesting to note, that despite being in the worst and longest downturn the industry has seen since the mid 80’s, we have yet to witness any of the dramatization noted in the past major crisis. The number of laid-up vessels is still at a fair minimal level, while despite expectation by many pundits, we haven’t yet witnessed any great outbreak of vessel arrests and filling for bankruptcy by shipowners. It seems as though the conditions of this market slump are quite different in many ways, which in turn have allowed and sustained earnings at permissible levels for several owners to continue to “get by”. What’s more is that seaborne trade has managed to grow at a healthy rate since 2009, allowing for much of the ordering excesses of the past to be fairly well absorbed into the market” Lazaridis said.
He concluded by mentioning that “all this does not point to a market where all is well. It merely indicates that things have yet to turn really bad. Taking a look at the current orderbook one would note concurrently that on the one hand there is still a significant amount of newbuildings expected for delivery within this year, while on the other hand the orderbook is swollen only up until the end of 2012. This means that if somehow we manage to overcome the worst come December, things will slowly start to look more optimistic. The only problem that remains thereafter is that of the excessive shipbuilding capacity that at any sign of hopeful optimism could cause another wake of new orders and in turn further headache for the industry. The truth of the matter is that the day after the exhibition we will once again find ourselves having to deal with the overwhelming supply of tonnage, deteriorating trade growth levels and the minimal financial support currently available. At the same time Hellenic shipping will to some extent have to also deal with the political troubles here at home. The imminent second round of elections have even put on the table the possibility of an altering the preferential tax treatment received by Shipping companies who have offices based in Hellas” Intermodal’s George Lazaridis concluded.
Meanwhile, there was a steady pace in SnP activity for yet another week, “with a number of newbuilding resales reported. On the tankers side, Norway’s Odjfell has reportedly snaped up the two newly built MR tankers “UACC Messila” (45,000dwt-blt 12 S. Korea) and “UACC Masafi” (45,000dwt-blt 11 S. Korea) which were sold enbloc for a price of around $ 37.5m each. While on the dry bulker the three ex-Trojan Supramax resales, namely the “STX Jinhae 4017” (57,300dwt-blt 12 S. Korea), “STX Jinhae 4007” (57,300dwt-blt 12 S. Korea) and “STX Jinhae 4009” (57,266dwt-blt 12 S. Korea) have been reported sold this week to European buyers at a price of around $ 24.3m” said Intermodal.
On the newbuilding market, “things continue to be fairly quiet this week. There has been a considerable slowdown in reported activity which might be partly attributed to the upcoming Posidonia exhibition at least from the Hellenic owners side. Although charter market conditions for most vessel types are still at relatively poor levels, there is still hope amongst shipbuilders that the exhibition will provide an opportunity for a well-placed marketing strategy to entice owners once again. We expect to see most of the efforts placed on promoting their recent “Eco” designs, especially for the smaller size groups of most segments which show some hope of a recovery in earnings or at least maintaining levels that could support such an investment choice. In terms of reported deals this week, most notable was the further order rumoured to have been placed by Lomar for two firm plus four optional Feedermax (1,100teu) Containerships at China’s Jiangsu Yangzijiang Shipyard” Intermodal concluded.