Portents for year ahead
'not all bad', Greiner says
THE shipping industry
will remain volatile and indispensable in the year ahead, with some upside
potential, according to a leading firm of accountants specialising in the
industry.
Moore Stephens shipping
partner Richard Greiner said that while grounds for extreme optimism are
difficult to find right now, the portents for 2016 are not all bad.
The Baltic Dry Index is
currently touching all-time lows, thanks to sluggish demand from China.
Accordingly, the sector
will have to reduce its newbuilding orderbook and increase ship recycling in
2016 in order to restore the balance.
The same is true for the
containership sector, where reducing capacity remains the best way to drive up
rates.
“CMA CGM's move to buy
NOL, meanwhile, although subject to regulatory approval, is an indication of
further consolidation,” said Mr Greiner. “It would be no surprise to see more
still in 2016.”
By comparison, tanker
markets saw a stronger year in 2015, not least because of falling oil prices.
But that factor has presented major challenges in the offshore maritime space.
Some experts are predicting a slide to $20 a barrel in 2016.
Mr Greiner also
highlighted a recent decision from the English Court of Appeal, which found for
the assignees of bankrupt bunker supplier OW Bunker, which could see hundreds
of owners being asked to pay twice for the same stem.
“In 2016, owners will be
monitoring a possible appeal against this decision to the Supreme Court, while
keeping an eye on disputes elsewhere,” Mr Greiner said.
Industry operating costs
will go up, as will the cost of regulation, with implementation of the Ballast
Water Management Convention a clear example here. The threat from cyber
security will also rise.
Interest in refinancing,
as a means of getting cash out of the business, is likely to increase, as are
calls for accelerated ship recycling and a cap on newbuildings.
The effect of
geopolitical developments should not be underestimated, while speculation about
the UK’s planned Brexit referendum in 2017 will add to uncertainties.
Source:
Lloyds list. 7 January 2016
http://www.lloydslist.com/ll/sector/ship-operations/article476975.ece
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