JAYA: Overcapacity in the container shipping industry will not be
absorbed quickly unless the global economy rebounds strongly in the
next two years.
Research said a strong economic recovery would be reflected in
container shipping demand to jump above 10% from the expected 4% to
7% in 2012 and 2013.
terms of vessel supply, there are too many ships headed for the
there is one small positive structural development. MSC, a leading
global carrier, deployed a 12,000 TEU vessels to the transpacific
market, providing the potential for fewer ships to flood into
Asia-Europe during this critical 2012 and 2013 period,” said OSK
in a recent sector update report.
OSK said the influx of 10,000 TEU ships into the transpacific before
2014 to 2016 was not expected to occur, as most terminals would not
be able to handle these ships although 50% the vessels in the
orderbook were more than 10,000 TEU ships.
for the 2012 orderbook, OSK said it would still be at least 2% above
demand and little that could be done as most of the ships were close
to be fully-paid.
by 2013 and 2014, we should expect the orderbook to be stretched out
and by 2015 and 2016, we should have been through the difficult
period of dealing with marginal tonnage and experience better a
demand-supply balance,” said OSK.
demand, OSK expected Asia-Europe trade lane to be a little weaker
than the Asia-US.
demand this year should see mid-single digit growth for long haul,
coming up from zero growth experienced towards the end of last
year,” said OSK.
rates, OSK said given that rates in 2011 fell 9% across the board
while nominal fuel costs rose some 30%, rates should rebound.
in Asia will rebound faster than global rates, as is the usual case.
But higher rates are ‘merely’ recouping the ground lost as a
result of rising bunker fuel prices.”
Research said for MISC Bhd, the decision to exit the container
business would help minimise future losses.
container division has been making losses since 2008.
its inability to absorb the high operating costs and also the rapid
changes in global trade patterns, which had caused significant
volatility, the company had decided to exit the business in November
is now in the midst of selling off its vessels, exiting trade lines
and making the necessary impairments or provisions, which has come
up to around RM1.45bil
company expects to complete the exercise by June, but all efforts
are to accelerate the process,” said Kenanga Research.
Kenanga said MISC was likely to see improvement in its Liquefied
Natural Gas, offshore, heavy engineering and tank terminal divisions
with the additional fleet and capacity expected from 2012.
we still foresee tough times for the company in the near term on
account of the soft operating conditions of its petroleum and
to management, the outlook for the two divisions would continue to
be challenging due to volatile charter rates, unyielding bunker
costs and demand-supply vessel imbalances,” said Kenanga Research.