Singapore: Maritime CEO magazine has a new columnist, one of the most in demand men in shipping these days. Since Dagfinn Lunde stepped down at DVB Bank at the end of last year he has been inundated with job offers, some of which he has taken such as chairmanship of Executive Ship Management, a seat at the board of new Oslo bank Maritime & Merchant and an advisory role at an Indian conglomerate looking to make inroads into offshore. And there’s Lunde’s new found writing role with this title where we look to him for finance tips.
Shipping as a long-term investment just is not attractive these days due to the constant spectre of overcapacity, he warns.
“No sector stands a chance of solid returns of more than two years thanks to the vast amounts of shipyard capacity and cash on tap from export credit agencies,” Lunde says, adding: “Sectors that are deemed hot are quickly washed over with waves of new tonnage, especially in the current environment where owners can put a downpayment on a ship of as little as just 5 or 6%; that’s like taking options.”
This time a year ago when Maritime CEO asked Lunde what sectors in shipping held the best prospects and he pointed towards LPG, product and chemical tankers, his selection proving to be on the money.
What then for 2014? Largely more of the same, he says. It should be another good year for LPG with demand still increasing, but the raft of newbuilds set to come onstream in 2015 and 2016 will see this two-year spike come to a familiar premature end.
Similarly on the chemical front, Lunde is optimistic for 2014, before all the orders placed in 2013 come into the market.
As far as the product market goes, the big question that will likely decide the fortunes of this segment is what will happen to American crude. If the Americans start to export crude, product demand will slide.
In the world of offshore, there’s still plenty of upside for jack-up rigs, says the finance veteran.
To access the full version of Lunde’s first column, click here. [11/03/14]