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09-04-2014, 08:01 AM
Worst than my typical view on shipping cycle -this prediction only projects 2 quick bull and 8 grinding bears...
Two good years, then a threat for bulk shipping: Industry boss
Published on Apr 9, 2014
Mr Jacques de Chateauvieux, chief executive of maritime group Jaccar Holdings, said that there is a good balance between growth in demand and supply until next year. -- PHOTO: LIM YAOHUI FOR THE STRAITS TIMES
THE market for shipping raw materials is expected to improve over the next two years before hitting possible headwinds in 2016, an industry boss said yesterday.
Mr Jacques de Chateauvieux, chairman and chief executive of maritime group Jaccar Holdings, said the so-called "dry bulk" shipping sector will have a good equilibrium between growth in demand and supply until next year.
"The utilisation is going up, the day rates are also going up. It started last year and we think that this will keep on going this year - the increase in the cargo to be carried is creating more favourable terms between supply and demand," he told The Straits Times.
Dry bulk carriers move raw materials such as grains, iron ore and coal. The sector is one of the three major components of global shipping, each with its own specific dynamics.
The other two are tankers used to ferry liquids, and container vessels, which move finished goods like shoes and phones.
The strength in bulk will be driven by China and, to a lesser extent, India. Mr de Chateauvieux noted that economic growth in China is expected to still exceed 7 per cent this year and the country imports raw materials to add to its stockpiles when commodity prices are low.
"People expect better terms for the bulk trade in these two years, in 2014 and 2015," he said.
"But more vessels have been ordered last year so the fear is, by 2016, we might enter an oversupply situation, depending on how the overall economy is doing. There's a big worry for 2016."
The Baltic Dry Index, a measure of the rates for shipping commodities, peaked in 2008 before plunging over 90 per cent during the global financial crisis. The volatile index has recovered slightly since then but is still far from the heights in 2008.
Mr de Chateauvieux says his company handles being in such a see-saw industry by being contrarian. It took deliveries of vessels in 2012 and last year but has none under order now - unlike many companies, which are waiting to receive their ships.
Jaccar is also the largest shareholder of offshore services provider Bourbon. Mr de Chateauvieux said that most of the sub-segments in this area - involved in the exploration and drilling of oil and gas - are well-balanced.
Mr de Chateauvieux, who divides his time between Asia and Europe, is in town to deliver today's Singapore Maritime Lecture, organised as part of Singapore Maritime Week.
JONATHAN KWOK
Two good years, then a threat for bulk shipping: Industry boss
Published on Apr 9, 2014
Mr Jacques de Chateauvieux, chief executive of maritime group Jaccar Holdings, said that there is a good balance between growth in demand and supply until next year. -- PHOTO: LIM YAOHUI FOR THE STRAITS TIMES
THE market for shipping raw materials is expected to improve over the next two years before hitting possible headwinds in 2016, an industry boss said yesterday.
Mr Jacques de Chateauvieux, chairman and chief executive of maritime group Jaccar Holdings, said the so-called "dry bulk" shipping sector will have a good equilibrium between growth in demand and supply until next year.
"The utilisation is going up, the day rates are also going up. It started last year and we think that this will keep on going this year - the increase in the cargo to be carried is creating more favourable terms between supply and demand," he told The Straits Times.
Dry bulk carriers move raw materials such as grains, iron ore and coal. The sector is one of the three major components of global shipping, each with its own specific dynamics.
The other two are tankers used to ferry liquids, and container vessels, which move finished goods like shoes and phones.
The strength in bulk will be driven by China and, to a lesser extent, India. Mr de Chateauvieux noted that economic growth in China is expected to still exceed 7 per cent this year and the country imports raw materials to add to its stockpiles when commodity prices are low.
"People expect better terms for the bulk trade in these two years, in 2014 and 2015," he said.
"But more vessels have been ordered last year so the fear is, by 2016, we might enter an oversupply situation, depending on how the overall economy is doing. There's a big worry for 2016."
The Baltic Dry Index, a measure of the rates for shipping commodities, peaked in 2008 before plunging over 90 per cent during the global financial crisis. The volatile index has recovered slightly since then but is still far from the heights in 2008.
Mr de Chateauvieux says his company handles being in such a see-saw industry by being contrarian. It took deliveries of vessels in 2012 and last year but has none under order now - unlike many companies, which are waiting to receive their ships.
Jaccar is also the largest shareholder of offshore services provider Bourbon. Mr de Chateauvieux said that most of the sub-segments in this area - involved in the exploration and drilling of oil and gas - are well-balanced.
Mr de Chateauvieux, who divides his time between Asia and Europe, is in town to deliver today's Singapore Maritime Lecture, organised as part of Singapore Maritime Week.
JONATHAN KWOK