Korean Yards Hold Fire Sale

Aug 20, 2012, 2:40PM EST
Further proof that the glut of overtonnage is not going away anytime soon.

MarineLink.com reported today that Korean shipowners are struggling to rid themselves of unsold ships at sustantially lower than market prices. Daewoo is trying to sell a pair of 320,100 dwt crude carriers after the buyer withdrew orders for the ships.  The orders had been placed during the heady days of 2007. Likewise, STX has put up for resale three 57,000 dwt bulk carriers after the buyer refused delivery.  Industry analysts expect more unsold newbuilds to be placed on the market at knock-down prices.

The industry faces a near-term future of overcapacity, low freight rates and rising fuel prices.  
New ships ordered in the boom years prior to the recession are still coming into the fleet (albeit at very attractive prices for shipowners bold enough to buy them).  Scrapping is part of the answer, but is not removing old tonnage fast enough to make a difference soon. Likewise, bankruptcies of shipping companies will not make the number of ships go away.

What this means is that fleet operators will need to reduce operating costs to survive in this grim economic climate.  To that end, the 2012 ShippingInsight Fleet Optimization Conference, October 8-10, in Stamford, Connecticut, will address mitigation measures and best practices for trimming costs and improving operational efficiency.  More than 30 speakers from all segments of the industry have been signed up. Online registration is open, and you can save money by registering early at www.shippinginsight.com.

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