[201010.EN.SEA] Recovering In New Building Sector Gains Momentum

ONE question that has been posed countless times over the course of the year has been, "will the recovery in the market in 2010 be sustainable?"

Opinions on this matter vary depending on who you talk to. For Asian shipbuilders, however, they are very optimistic about the recovery in their market as newbuilding orders continue to grow. 

China’s largest shipping line, Cosco, and Taipei-based Evergreen Marine, a shipping line that had been very quiet on the newbuilding front when the last building frenzy gripped the container shipping sector, are both reported to be looking to invest large pots of money into new capacity, with expectations of a good year ahead in 2011. 

However, in the short term some carriers are not so optimistic. The world’s largest shipping company, Maersk Line, is now talking about cutting capacity in expectation of slowing demand in the current quarter, according to a report in our sister publication, the Hong Kong Shipping Gazette.

The active containership fleet has soared more than 20 per cent to 13.9 million TEU since January, Alphaliner recently reported. Meanwhile, the global idle fleet stands at a low point of 1.6 per cent in September compared to 11.6 per cent at the beginning of 2010. 

However, Alphaliner doubts whether the growth in demand will continue and predicts that idle boxships will increase in the fourth quarter as demand weakens for the winter season.

Although very few ships have been idled to date, carriers are said to be uncertain about the winter demand, particularly after a weaker-than-expected second half so far, said Alphaliner. 

The Paris-based consultancy group speculated that the idle fleet could rise from the current 220,000 TEU to 600,000 TEU and one million TEU by the year’s end. 

But despite a potential lull in vessel demand in the short term, carriers are exercising optimism on the future state of the market as newbuilding orders continue to come in. 

Source : SCM, 12.10.10.