SUPPLY-side challenges are making for a highly uncertain outlook in the dry and wet markets, a conference was told today in Dubai.

Andre Urstad, associate partner at Marsoft International, told delegates to the Marine Money conference: "Several issues are at play that have never been seen before."

The scale and speed of the drop in shipping business was somewhat comparable to the early 1980s, he said, but there are many differentiators, said Urstad, who explained that the fleet in the 1980s was delivered on time and that demand simultaneously crashed.

"That's not the case this time," he told delegates.

Using tankers for floating storage has "saved" tankers, he declared, adding that the drybulk sector had been sustained by Chinese demand.

Pouring over Marsoft numbers, Urstad highlighted several scenarios in which ship supply will outbalance cargo-carrying demand unless delivery and scrapping slip significantly. However, he was quick to note that the numbers remain highly uncertain.

"We believe in a steady recovery, and tonne-mile demand looks healthy, especially with economic expansion in China and Asia," he predicted. ?We think that congestion will continue but that floating storage will reduce."

But Urstad added that the big questions are how much delivery slippage and how much scrapping there will be.

 

Source:Portguide Author