OSLO
- New ship deliveries in the depressed dry bulk market will be below
expectations this year and vessel scrapping will remain high, providing the
sector some relief, shipping executives said on Wednesday.
Many
of the ship orders on the books are unlikely to be fulfilled because either the
operator or the ship builder is defunct or close to it, the executives said,
adding extremely low charter rates would squeeze more ships from the market.
“About
10 percent of the order book is rubbish,” Lasse Kristoffersen, the Chief
Executive of ship owners and operators Torvald Klaveness Group told a
conference.
The
dry bulk sector has been in a deep depression for years and ships being
launched now were ordered during the boom years before the global financial crisis.
Firms
are struggling just to survive as spot charter rates are below $5,000 per day
for the large, capesize class ships, well below break even levels and just a
fraction of rates in excess of $100,000 a day in 2007 and 2008.
The
global fleet is scheduled to grow by over 100 million deadweight tonnes (dwt)
this year, well over 10 percent, but Kristoffersen predicted that the actual
figure would be closer to 65-70 million dwt.
“With
scrapping included, our projection is for a net increase of just 35 million
tonnes,” Konstantinos Adamopoulos, the chief financial officer of Safe Bulkers
said.
That
is below some market expectations with Morgan Stanley predicting the fleet to
rise by 63 million tonnes or exactly 10 percent, and for the utilization rate to
fall to 74 percent from 77 percent.
“Based
on low January figures, we think non-deliveries this year could be dramatically
higher,” Ted Petrone, the President of operators Navios Corporation said.
In
2012, around 34 million tonnes were scrapped, or 5.5 percent of the entire
fleet, the highest rate in decades, said Norwegian bank DNB, one of the biggest
global shipping lenders.
“It’s
good if we have rates this low for the next 6-9 months because it’ll push for
more scrapping,” Herman Billung, the CEO of Golden Ocean said.
Executives
estimated that around 90 million dwt of capacity was older than 20 years and
thus ripe for immediate scrapping.
And
while new orders peaked in excess of 170 million dwt in 2007, they fell as low
as 20 million dwt last year, DNB said.
Source: Malaya. 24 June 2013
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