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 Reporter July 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Rosneft and NADL Sign Exchange of Assets Deal

Rosneft, Seadrill Limited and North Atlantic Drilling Limited (NADL) signed a Framework Agreement that envisages long-term cooperation in the sphere of oilfield development projects.

Norman Murray, Petrofac Chairman Quits

Petrofac, the international oil & gas facilities service provider, today announces that Norman Murray, who has been Chairman since May 2011, has resigned from

MN 100: AEP River Operations

16150 Main Circle Drive, Suite #400 St. Louis, MO 63017 Tel: (636) 530-2100  Email: info@aepriverops.com Website: www.aepriverops.com President: Keith Darling The

Contracts

Rosneft and NADL Sign Exchange of Assets Deal

Rosneft, Seadrill Limited and North Atlantic Drilling Limited (NADL) signed a Framework Agreement that envisages long-term cooperation in the sphere of oilfield development projects.

YPF Oil Extends Operating Agreement with Sinopec to 2027

Argentina's state oil company YPF agreed Friday to extend its operation until 2027 in partnership with a local unit of China's Sinopec oil in an area of ​​a

Scottish Sea Farms Orders Newbuilds

Macduff Shipyards Ltd. has received a contract worth more than £3.3 million pounds from Scottish Sea Farms for the design and build of four 19.8-meter 150T steel

Shipbuilding

Scottish Sea Farms Orders Newbuilds

Macduff Shipyards Ltd. has received a contract worth more than £3.3 million pounds from Scottish Sea Farms for the design and build of four 19.8-meter 150T steel

LNG Transport Barge Design Approved by ABS

Conrad Shipyard, L.L.C. engaged Bristol Harbor Group, Inc. (BHGI) to develop a 3,000 cubic meter Liquefied Natural Gas (LNG) transport barge utilizing a Bristol

Airbus May Sell Stake in Submarine Supplier

Airbus is considering a sale of its 49 percent stake in submarine supplier Atlas Elektronik as part of a reshuffle of its military business, German newspaper Die

Finance

Sinopec's Profit up at 32.5 billion yuan in 1H, 2014

Asia's largest refiner - China Petroleum & Chemical Corporation announced Friday night, according to international accounting standards, the first half net profit of 32.

Polynesian Shipping Sold to Neptune Pacific Line

The Board of Polynesian Shipping Line Limited, Apia informed   that the business and the Company’s associated investments have been sold to Neptune Pacific Line Limited.

Airbus May Sell Stake in Submarine Supplier

Airbus is considering a sale of its 49 percent stake in submarine supplier Atlas Elektronik as part of a reshuffle of its military business, German newspaper Die

People in the News

USCG Suspend Search for Missing Man in Biscayne Bay

Coast Guard search-and-rescue crews suspended their search for a burglary suspect in the vicinity of the Rickenbacker Causeway Friday afternoon. At approximately 2 a.

Norman Murray, Petrofac Chairman Quits

Petrofac, the international oil & gas facilities service provider, today announces that Norman Murray, who has been Chairman since May 2011, has resigned from

German Shipyard FSG Re-organizes Top Management

Flensburger Schiffbau-Gesellschaft (FSG) says it will be headed by a new management team from January 1st 2015, details as follows: Current Chief Technology

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Standards Naval Architecture Navigation Pipelines Pod Propulsion Ship Repair Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | terms and conditions | 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: 0.1685 sec (6 req/sec)