Greater China

Crisis an opportunity for new investors: McKinsey & Company

Ningbo: The current state of the market has become an opportunity for new investors, especially Asian investors, Steve Saxon of McKinsey & Company’s Beijing office told delegates today at Cosco-organised World Shipping Summit in Ningbo.

Low steel prices and competition between shipyards have led to the lowest ever shipbuilding prices, however lines are suffering from losses and traditional financing sources have dried up, opening the door for new investors. 

“We estimate continued oversupply, low charter rates, layups and “break-even” returns for the lines,” Saxon said.

“However, Chinese lines should continue to be placing large efficient vessel orders as it is the only way to continue to compete, and partnering with investors for funding, they should focus heavily on cost and efficiency as revenue will remain weak, ” he added.

“A lack of funding in the industry indicates the potential for higher than cost capital returns,” Saxon said, adding that there are investors who were previously unfamiliar with shipping entering the market. [07/11/13]


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