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Österreichischer Lloyd: Gap widens between dry bulk and containers

Limassol: The fortunes of dry bulk and container shipping look to be headed in very different directions, according to the veteran head of one of Cyprus’s top names in shipping.

Captain Eberhard Koch, a German national, is chairman and managing partner of Österreichischer Lloyd Seereederei (Cyprus), a company whose lineage stretches back to 1836, and was at the turn of the 20th century in charge of one of the biggest fleets afloat. Nowadays, Österreichischer Lloyd has nine multipurpose vessels.

“For me, the container market looks much better, compared to bulk,” Koch says.

The bulk market crashed “tremendously” during the fourth quarter last year and Koch sees no signs at all that this is going to change for the better in the near future with the Baltic Dry Index hovering around record lows and the nasty overhanging huge orderbook set to deliver this year and next.

Prospects look brighter for  container shipping in 2015, however. Rising volumes will help to support freight rates and tonnage demand, Koch says. Expected demand may even outstrip supply over the next 12 months, Koch posits.

He is especially optimistic in the smaller boxship sizes where there is significant scrapping and an almost zero orderbook.

The German national notes much lower lay-up numbers for boxships, while containership chartering has been very active of late.

“As we have seen during previous crises, we might see a scenario in which charter rates in 2015 are rising but second hand prices will fall below 2014 levels,” Koch says.

He points to recent Deutsche Bank research which notes that for every $10 drop in the price of oil per year, world GDP increases by 0.4%. “As shipping derives its demand from world GDP growth rates, any increase in world GDP would therefore be beneficial for our business,” he says. Moreover, a weak euro may keep European exports affordable and assist a possible revival of the Eurozone.

As for Österreichischer Lloyd, there are no plans to order new ships soon – “My hands are totally tied up,” says Koch, but second hand multipurpose vessels might be of interest.

Koch’s main target this year, he says, is to find the right strategic partner to develop the company for future demands.  [16/01/15]


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