Hong Kong: Noting the raft of new ship orders, especially in the capesize sector, Jefferies’ Hong Kong analyst Johnson Leung mulled in a report just out whether shipping is close to hitting an inflection point.
Large containership orders are already being negotiated. “To our surprise, even capesize bulkers are starting to see orders coming back,” Leung noted. Orders of 21 capesize vessels have been placed so far this year, compared to just 32 capesize vessels orders placed last year and 22 new capesizes delivered in 2013 so far.
The bases for the inflection point thesis are that the orderbook is running down; and the global economic recovery will bring shipment growth back to pre-global financial crisis levels.
“We think,” Leung wrote,” the argument based on the orderbook running down is self-defeating.”
Shipyards may have sufficient capacity to supply 10% per annum growth for the shipping industry, which is “not sustainable”, Leung wrote.
“We also do not believe there is a financing shortage as we now live in a world where there is plenty of liquidity.”
Concluding, Leung suggested: “The growing consensus view of shipping approaching inflection point may thus divert liquidity back to shipping.” [26/03/13]