Dalian: The World Economic Research Institute is part of Dalian Maritime University, and in Professor Liu Bin, the institute can boast one of Asia’s foremost shipping economists. Liu, in good news for readers, reckons shipping is in a firm recovery mode; the bottom has been hit.
Overcapacity still exists, he concedes, but is a fraction of what it was in 2008. Moreover, the bad debts accrued by shipping companies have receded.
Just as important for Liu is an increasing détente reached between shippers and shipowners.
“The newbuilding competition between shippers and owners is not intense anymore,” Liu says. “Some of them have started to look for cooperation opportunities such as Vale and Cosco. It is a big change for the relationship between shipper and owner.”
Liu even reckons the dry bulk market is not as bad as the Baltic Dry Index reflects. Volumes are increasing, while operating costs are low so dry bulk can be profitable, he insists.
For tankers, Liu believes the second half of the year will see China import far more oil than in the first six months, which could help drive rates further north.
Low shipbuilding prices have seen owners upgrading and optimising their fleets at very good prices, Liu observes.
Consolidation in every facet of shipping, whether it is among lines, ports or yards is a trend that will continue, Liu says.
“The Chinese ports are likely to be integrated into bigger port groups and have some regional features, such as a Yangtze river port group, and a Bohai Bay port group,” Liu says.
Liu has one final piece of advice for the myriad private Chinese shipping lines. He urges them to list on the stock market to improve their operations and strengthen their footprint.