Executive Briefings

Lines Struggle with Overcapacity and Liquidity, Exec Claims

A leading ship finance executive has claimed overcapacity will plague the container, dry bulk and tanker market through 2012.

"The problem in most markets segments definitely is the significant oversupply of ships, which is basically due to the fact that markets were high for a while," Dagfinn Lunde, member of the board of managing directors, responsible for shipping finance, for German-based DVB Bank, told the bank's in-house publication Performance. "Today, the shipbuilding capacity is about 2.5 times as big as the immediate replacement of tonnage. We expect China and Korea to continuously put ships into the market. With too many ships persistently coming into the different market segments, the prices for newbuildings will further decline. The oversupply situation is killing the shipping markets."

Lunde said the overcapacity is the liquidity of shipping companies in all sectors.

"If there is an oversupply in your market segment, you will realize less income for your product and - resulting from that decrease - your enterprise will then be facing a liquidity problem," he said.

Read Full Article

A leading ship finance executive has claimed overcapacity will plague the container, dry bulk and tanker market through 2012.

"The problem in most markets segments definitely is the significant oversupply of ships, which is basically due to the fact that markets were high for a while," Dagfinn Lunde, member of the board of managing directors, responsible for shipping finance, for German-based DVB Bank, told the bank's in-house publication Performance. "Today, the shipbuilding capacity is about 2.5 times as big as the immediate replacement of tonnage. We expect China and Korea to continuously put ships into the market. With too many ships persistently coming into the different market segments, the prices for newbuildings will further decline. The oversupply situation is killing the shipping markets."

Lunde said the overcapacity is the liquidity of shipping companies in all sectors.

"If there is an oversupply in your market segment, you will realize less income for your product and - resulting from that decrease - your enterprise will then be facing a liquidity problem," he said.

Read Full Article