Shipbuilding Market Prospects: COSCO Leader Shares Insights

MarineLink.com
Thursday, April 03, 2014
Captain Wu Zi Heng: Photo courtesy of COSCO

COSCO Vice-Chairman & President, Captain Wu Zi Heng responded in a question and answer session about his views on the future of the shipping market in an interview incorporated in the company's recent 2013 Annual Report. Excerpts as follows:

Q. What do you foresee the next few years will be like for the shipbuilding business?

A. The shipping market picked up slightly in the second quarter of 2013 in anticipation of the recovery of the Eurozone economies as well as that of the United States. However, demand was uneven across the various ship types and classes, which were still stuck in an oversupply situation.

It is too early to predict anything, as the ship charter business is still very uncertain. Our most immediate concern is its impact on the price levels of newbuilds. Price increases for newbuilds in 2013, compared to 2012, were uneven across the size categories with 16.3% rise for Capesize vessels, 7.8% for Panamax, 9.1% for Handymax and 6.2% for Handysize. The market is still very fragile, highly susceptible to slight changes in untoward economic, monetary, fiscal policy and political developments.

There was some rebalancing in supply and demand in 2013, with quite a sizeable volume of scrapping in 2013. The subsequent slight pick up in charter demand had also given a positive spin to market sentiments. We are still wary that global economic uncertainties could continue to have an unsettling effect on the shipbuilding market.

Q. What are your observations going Into 2014 and beyond?


A. The International Monetary Fund (IMF) in its latest update on its World Economic Outlook in January 2014 projected the world economy to grow by 3.7% in 2014 and 3.9% in 2015. However, it flagged concerns about the global economy and IMF warned of downside risks such as the normalisation of monetary policy in the advanced economies and potential volatile capital movements.

Even before the latest IMF prognosis, analysts had already expressed concerns of threats to recovery, including the Eurozone's financial health, US fiscal policies, the tapering of quantitative easing, as well as the still uncertain depth of recovery of the Japanese, Eurozone and emerging economies. Also of concern to us is the strength of the Chinese Yuan and increasing cost pressures.

Over at the Eurozone, whatever growth has been reported seems to be uneven across member countries, with continuing concerns about the banking system there. The handling of the tapering of bond purchases by the US Federal Reserve could affect capital flow and interest rates that could negatively impact business growth.

It is important for the various governments to ensure that reforms, fiscal policies and economic measures work effectively to spur growth. With this economic backdrop, we remain concerned about the speed of overall global recovery as the shipping industry badly needs a quick return to better trading conditions.

Another observation is that we cannot foresee when newbuild prices can recover to a sustainable level. We also cannot expect new contract volumes to return to the pre-2008 level in the short-term, and therefore the market could continue to be pricesensitive especially in the lower market segment.

The International Energy Outlook 2013 issued by the United States' Energy Information Administration (EIA) had projected that world energy consumption would grow by 56% between 2010 and 2040, with fossil fuels meeting up to 80% of world energy use over the three decades. We view the projected continued rise in energy consumption as an important boost for the offshore marine market fundamentals, although there are still a lot of economic uncertainties going forward.

Source: COSCO Corporation (Singapore)


 

 

 

 

 

 

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter February 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

SunEdison Restrained from 'Unusual' Asset Transfers

Solar company SunEdison Inc said a U.S. court has restrained the company from making any unusual asset transfers until a hearing in a lawsuit brought on by investors

Maersk to Scrap Ships at India's Alang Beaches, NGO Dismayed

Maersk Line said on Friday it had chosen four shipbreaking yards along India's Alang beaches to handle an increase in vessels that need to be scrapped, to the dismay

Teknotherm Marine Moves HVAC Arm to Bergen

Maritime heating, ventilation and air conditioning (HVAC) firm Teknotherm Marine has established a new subsidiary is established with the name Teknotherm Marine HVAC AS.

Contracts

Sea IT, Veritas Tankers Ink Long-term Software Deal

Sea IT has entered a long term ICT agreement with Veritas Tankers. The agreement comprises installation of BlueCORE Generation 4, an ICT platform specifically developed for the marine industry,

Interior Facelift for Queen Mary 2

Cunard’s luxurious flagship, the iconic 2,620 passenger ocean liner Queen Mary 2, will undergo an interior refit at the hands of McCue Marine during a 25-day multimillion-pound

Chemical Shipping Freight Rates to Remain Under Pressure

On the back of low bunker prices and more new buildings to be delivered in 2016, chemical shipping freight rates for both contracts of affreightment and spot cargoes

Shipbuilding

Nordana Sea Delivered to Symphony Shipping

After successful sea trials, M.V. Nordana Sea was delivered to Symphony Shipping on February 11, 2016. Constructed by builder Ferus-Smit in the Netherlands (yard number 419),

James Troop Supplies Engines for 3 Naval Vessels

Liverpool City Region (UK) based ship engine specialist James Troop & Co has won an order to supply Volvo Penta diesel engines for three European naval vessels being built on Merseyside.

OSV Delivered to MC2 in Dubai

Marine Core & Charter LLC (MC2) headquartered in Dubai has taken delivery of the new build PETRA-1, the first of two, 45-meter Fast Offshore Support Vessels in

Finance

SunEdison Restrained from 'Unusual' Asset Transfers

Solar company SunEdison Inc said a U.S. court has restrained the company from making any unusual asset transfers until a hearing in a lawsuit brought on by investors

Paragon Offshore to File for Bankruptcy

Paragon Offshore Plc said it will file for Chapter 11 bankruptcy on or before Feb. 14, becoming the first U.S. energy-related company to seek court protection from

Philippines Mulls Bilateral Sea Talks with China

The Philippines may consider two-way talks with China to resolve a territorial dispute in the South China Sea but only if it wins its case with Beijing at an arbitration tribunal in The Hague,

People in the News

Helsinki, Tyumen State Universities to form Arctic station

Within the framework of the international project Reeh, Tyumen State University in cooperation with the University of Helsinki are planning to create a unique Arctic observation stations.

Guy Harvey to be Honored by Seafarer's House

Guy Harvey – artist, conservationist and entrepreneur – has been selected as this year’s recipient of the Seafarers’ House International Golden Compass Award. The

Delia Succeeds Schmidt as Ohmsett Program Manager

MAR Incorporated has named John Delia the Program manager for Ohmsett – The National Oil Spill Response Research & Renewable Energy Test Facility, succeeding Bill Schmidt who retired in December 2015.

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Maritime Standards Navigation Port Authority Salvage Ship Repair Ship Simulators Sonar
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.0321 sec (31 req/sec)