According to the latest quarterly shipping confidence survey from international accountant and shipping adviser, Moore Stephens, confidence levels have recovered slightly from their lowest level for over four years.
It says that the small upturn in confidence appears to be related, among other things, to an increase in scrapping and the beginnings of a gradual improvement in the overtonnaging crisis which has dogged the industry for several years.
Scrapping featured in a number of responses to the survey. Namely that new scrapping and recycling initiatives will have a major impact on the market, as will the Ballast Water Management (BWM) convention. The industry hopes that as more and more older ships go for scrapping, and businesses start to recover, freight rates should increase and the market should start to recover.
Not everybody was convinced, however, that things are moving in the right direction. “More demolition and greater discipline in respect of newbuildings is required before the upturn can begin,” said one respondent, while another emphasised that: “Even though scrapping levels are high, the number of newbuildings on the market will continue to result in oversupply and keep freight rates depressed.”
Elsewhere, respondents generally remained concerned about the continuing worldwide economic downturn and, in particular, the financial difficulties of the eurozone and the problem of the availability of third-party finance.
The likelihood of respondents making a major investment or significant development over the next twelve months was up on the previous survey, on a scale of 1 to 10, from 5.3 to 5.4 – the highest level since May 2011.
Richard Greiner, Moore Stephens shipping partner, said: “This increased willingness to invest is due in part to what many see as the first signs of a correction in the industry’s tonnage overcapacity problems. Scrapping activity has increased, although there is simply not enough demolition capacity in the world for this to be a solution on its own.”
The going is still going to be tough though. He added: “The inescapable conclusion is that those companies that emerge intact and profitable from one of the darkest periods in recent shipping memory will be among the leanest and greenest the industry has ever seen.”
Some of Felixstowe's regular visitors that have been scrapped in the last 5 weeks.
Msc Brasilia [PA] IMO 8502872 Container vessel built 1986 - 43,270 dwt
Msc Washington [GR] IMO Container vessel built 1984 - 53,325 dwt
Hanjin Osaka [LR] IMO 9015527 Cintainer vessel built 1992 - 62,681 dwt
Maria Rickmers [MH] IMO 9063976 Container vessel built 1993 - 14,069 dwt
MSC Chelsea [PA] IMO 8128925 Container vessel built 1983 - 25,412 dwt
Hansa India [DE] IMO 9070967 Container vessel built 1994 - 43,069 dwt
Bosporus Bridge [PA] IMO 9043768 Container vessel built 1993 - 47,359 dwt
MSC London [LR] IMO 8502884 Container vessel built 1986 - 43,270 dwt
MSC Dymphna [MT] IMO Container vessel built 1988 - 43,224 dwt
Conti Shanghai [DE] IMO 9113630 Container vessel built 1996 - 44,510 dwt
MSC Sardinia [LR] IMO 8502896 Cintainer vessel built 1986 - 43,270 dwt
Santa Monica [LR] IMO 8918992 Container vessel built 1991 - 30,000 dwt
Apl Zircon [KN] IMO 8802909 Container vessel built 1989 - 51,534 dwt
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