CHANGING market conditions impacting the maritime industry will be the focus of discussion at the Sea Asia 2015 convention in Singapore from April 21-23.
Speaking at the event, maritime leaders will highlight volatile commodity prices as well as fluctuating supply and demand as key drivers behind the changing conditions, say organisers.
The speed at which the industry can adapt to this changing state of play will ultimately define the maritime industry's ongoing success, they say.
Commenting on the dry bulk shipping sector Precious Shipping managing director Khalid Hashim said the slow-down in China's real estate industry has reduced demand for iron ore at a time when there's more dry bulk ships in the global fleet.
"Iron ore makes up a significant portion of the cargo transported by dry bulk shippers and this softening demand, coupled with increased capacity, has resulted in a significant shift in the supply and demand balance within the global dry bulk shipping sector," he said.
"Companies are focusing on driving efficiencies and managing costs to weather these challenging conditions. One of the ways they're doing this is by scrapping or selling older assets - a move which also allows them to generate more cash."
"Companies are also raising equity by going back to their shareholders or the market to ensure they have sufficient liquidity to support them over this time," said Mr Hashim.
Singapore Maritime Foundation chairman (SMF) and managing director, marine & technology, at Keppel Offshore & Marine Ltd, Michael Chia, commented that fluctuating commodity prices is another new reality impacting the industry.
"Low bunker prices have a positive impact on the shipping industry, but our marine and engineering sectors are likely to face some headwinds in securing new orders. Fortunately, the industry has a full backlog of orders that will carry them through this year and into 2016."
Maritime and Port Authority of Singapore (MPA) assistant chief executive, development, Tan Beng Tee, said the government is working with the industry to ensure it is prepared to manage changing market conditions.
"MPA is introducing schemes to develop quality manpower which is critical to drive growth in this global business," she said. The MPA will this year provide funding of S$65 million (US$47.8 million) to attract and groom talent for the maritime sector.
Ms Tan added that MPA is also investing in infrastructure development. "The completion of phases three and four of the Pasir Panjang terminal by end 2017 will increase our handling capacity by more than 40 per cent," she said.
Source : HKSG.