Wednesday, March 28, 2018

Shipping: "Charter Market Capacity Crunch Will Put Dent in Carrier Profitability"

What could have been.
Of course you know how this plays out, the capacity will come on-line in 2019 and by 2022 half the names are trying to talk their creditors into renegotiating terms.

From The Loadstar via gCaptain:-
Containership charter rates are at a 30-month high on the back of strong demand, and Alphaliner is predicting an “impending capacity crunch”.

This will come in most vessel sizes as carriers return to full sailings after the Chinese new year, it says.

The container lines are preparing to launch a number of new services, which the consultant said was “expected to take out most of the idle capacity in the coming month”.

Despite a slight increase due to void sailings around the Chinese New Year, the number of container vessels in hot or cold lay-up remains at an historical low of just 125, with capacity of 626,996 teu, representing 2.9% of the global cellular fleet.

Owners that had all but given up on finding profitable employment for their ships are now reactivating and crewing the vessels as the market continues to improve and charterers look to fix longer-term.

This has all but stymied the boxship demolition market, with only 13 ships sent to the scrapyard this year, compared with 63 by the same time in 2017.

“The impending capacity crunch is already starting to be felt in the charter market, with charter rates rising to a 30-month high on the back of the strong demand for fresh tonnage in April,” said Alphaliner.

It said the supply of tonnage remained low for most vessel sizes and was “getting even tighter for certain ship types”....MORE
The biggest of the ship builders, Hyundai Heavy Industries, was talking to their bankers a couple months ago to ensure any constraints on capacity would not be financial. Rock-n-Roll.
Or at least K-Pop

They also did this a couple weeks ago, reported at Hellenic Shipping News on the 27th: 
Hyundai Heavy Industries Boosts Capital with New Shares