Bulker orders threaten industry
THE shipping industry is ordering twice as many bulk carriers as it needs in a reckless move it will come to regret in two or three years, according to leading sector analyst.
The managing director of British-based Clarkson Research Studies, Martin Stopford, yesterday told a meeting of the Hong Kong Shipowners Association the sharp recovery in the dry-bulk trade this year had been followed quickly by a renewed growth of the dry-bulk fleet.
Last year set record levels, with 19.4 million deadweight tonnes (dwt) of orders, representing 8.6 per cent of the fleet.
On the basis of the firm order book - with some movement of combined carriers into dry - and after deducting scrapping, the bulk supply was expected to grow by 3.9 per cent this year and 5.3 per cent next year.
That meant the expansion of the bulk fleet would continue at a faster rate than demand, Mr Stopford said.
He estimated that the annual average requirement for new bulk carriers up to 2000 at 10 million dwt a year.
So far this year, ordering has run at an annual rate of 16 million dwt.
'This level of ordering is in excess of the trend requirement and damage has been done,' he said.
'If this rate of ordering continues, I predict that we will face a protracted recession during the closing years of this decade.' If ordering was cut back to six million dwt a year for a couple of years, then the second half of the 1990s 'could be quite a profitable experience', he said.