Singapore: One of the region’s best known ship financiers has warned there is plenty more “stress” in store for shipowners if conditions do not pick up soon.
Speaking exclusively to SeaShip News, Abhishek Pandey, director and head of shipping finance, South East & South Asia, at Standard Chartered, said: “If the situation doesn’t improve whereby the supply issue persists, freight rates remain subdued, bunker rates stay where they are and financing doesn’t ease up then there will be more stress."
Pandey said it was vital to have alternative sources of revenue during the shipping downturn. “Undiversified players will struggle as the cash-flow pressure mounts,” he said, adding: “Size will not matter and even large companies will feel squeezed.”
In five years Standard Chartered’s ship fianance team has grown to have 25 members with on-the-ground presence in six locations: Singapore, Hong Kong, Shanghai, Dubai, London and New York. The size of the bank’s shipping portfolio today is around US$4.5bn.
Casting his crystal ball, Pandey has a few observations of important markers going forward for both the shipping and offshore sectors.
“We believe eco friendly designs will influence the next generation of assets across sectors in shipping,” he said. “Second, larger vessels in the container segment will go through the litmus test in coming years and hopefully will come out victorious.”
On the dry side the Newcastlemax design may gain popularity primarily with industrial players like miners and power companies, Pandey reckoned.
Pandey remains bullish on the LPG and LNG sectors while concluding that deepwater and high spec assets will see increased demand in the offshore space. “The offshore trade which is already quite regional will get even more sophisticated with tighter regulations such as age norms and cabotage laws,” he maintained. [28/09/12]