[031013.EN.SEA] Shipping Confidence Holds, But Doubts Over Excess Supply

THE latest Shipping Confidence Survey from international accountant and shipping adviser Moore Stephens shows that overall confidence levels in the shipping industry held firm over the three-month period to August 2013, maintaining the current level.

Yet doubts persist over the level of excess tonnage and the resultant effect on freight rates, and concerns are mounting over the increasing cost of regulation.

In August the average confidence level expressed by respondents in the markets in which they operate was 5.9 on a scale of 1 (low) to 10 (high), identical to the figure recorded in the previous survey in May 2013.

This is the highest figure since the 6 recorded in November 2010. The survey was launched in May 2008 with a then confidence rating of 6.8, the London's Tanker Operator reported.

Charterers' confidence reached a three-year high, up from 5.5 to 6.3, equalling the all-time survey high for charterers. Confidence was also up for owners, from 5.7 to 5.8, the highest figure since May 2011 and for managers, from 6 to 6.2. Confidence on the part of brokers remained unchanged at 5.9.

Geographically, confidence was up in both Asia (from 5.8 to 6.1) and Europe (from 5.8 to 5.9), and unchanged in North America at 6.

Turning to the freight markets, there was an increased expectation of higher rates in all three main tonnage categories covered by the survey. The number of respondents overall who expressed an increased expectation of higher rates in the tanker sector over the next 12 months was up by one per cent to 38 per cent, the same figure as that recorded when the survey was launched in May 2008, but still some way short of the survey high of 50 per cent posted in May 2010.

Charterers (up 14 per cent to 43 per cent) led the way in terms of increased expectations of better rates, followed by managers, up five per cent to 36 per cent. The number of managers anticipating lower tanker rates fell seven per cent points to an all-time survey low of six per cent. In contrast, there was a four per cent drop, to 37 per cent, in owners' expectations of improved tanker rates.

"It is now a full 12 months since we recorded a decline in shipping confidence. This is a clear indication that shipping is feeling optimistic about its future, as well as more comfortable with the state of the political and economic climate in which it operates," said Moore Stephens partner Richard Greiner.

The issues giving rise to most concern are "overtonnaging, declining freight rates and access to finance which have remained fairly constant throughout the life of the survey. But there are signs of improvement in all areas", he said.

Source : HKSG.