11 August 2011

Recession will speed up ship demolition:

London, Aug 11 (GCTL): A global recession would mean 10% of the world’s shipping fleet used to carry coal and iron ore would be demolished sooner, as Chinese demand for raw material would be cut, Arctic Securities ASA said.

The demolitions will happen faster if developed economies shrink because any contraction would curb processing of raw materials by China and other countries the export manufactured goods, Erik Nicolai Estavest, an analyst of Arctic in Oslo, said,

At present 4.4% of the fleet is being demolished and a total of 10% needs to be removed for owners to halt a slide in charter rates, he said, adding that: ‘The oversupply will be more apparent if we do have another recession…..

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Source: Greater China Transport Logistics. 11 August 2011

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