Business | Shipping
Ship prices to remain high for two years
According to a report by Exim India, shipbuilders will be able to keep commanding record-high prices for at least two more years because rising demand has outpaced supply.
- By Frank Kennedy, Special to Gulf News
- Published: 00:00 April 30, 2007
According to a report by Exim India, shipbuilders will be able to keep commanding record-high prices for at least two more years because rising demand has outpaced supply.
Executives at Varun Shipping and at BW Shipping Managers Pte said they expect current prices to hold steady for at least two years. STX Pan Ocean Co, South Korea's biggest transporter of iron ore and coal, said it may have to keep paying top dollar even longer.
Sea carriers have ordered a record number of new ships exceeding $105.5 billion last year, enough to keep the largest yards working at full capacity until 2010. Demand has been driven by the booming trade with China.
"High building prices will remain for the time being, at least until 2011-12, because of low capacity and strong growth in China," STX Pan Ocean CEO Lee Jong Chul said at an event in Singapore.
Shipowners in 2006 ordered new vessels worth $105.5 billion, mainly oil tankers, 37 per cent more than in 2005, according to London-based Clarkson Plc. That exceeded the previous record of $76.3 billion spent in 2004.
"High ship prices are a concern, but as long as the premium on the newbuilding price is absorbed into freight rates, it still makes economic sense for us," Y. D. Khatau, managing director of Varun Shipping, said at the Singapore meet.
Shipyards have also raised prices for very large crude carriers by 67 per cent since 2004 to an all-time high. The price of bulk carriers that move iron ore and coal has increased by about 30 per cent this year, according to an analyst. Despite the costs, shipowners are still buying. Hyundai Heavy Industries said on April 2 it had received orders this year for 47 more vessels. That brought its backlog to 270 ships valued at $ 26 billion, representing three years of work!
GAC floats new fire services unit
Gulf Agency Co (GAC) has launched GAC Fire, Rescue & Safety to offer full-warranty fire and safety systems and services around the world, the company has announced in a press release. The service will be supplied under the GAC Solutions umbrella and will combine the Group's ship agency, logistics and offshore expertise and infrastructure with a service partner network.
Oman coast gets 'Special Area Status'
In order to help protect its coasts from pollution, the Oman government has signed an agreement with the International Maritime Organisation that designates its coastal areas to have 'Special Area Status' from January this year. The legislation passed by the Oman government in Dec-ember 2005 has been implemented, and is applicable to any company or organisation that may be vulnerable to oil spills and/or any other form of hydro-carbon contamination in the course of their business, whether on land or offshore. The national oil spill response arrangements have been revised.
Emma Maersk named 'Ship of the Year'
The Lloyd's List Awards have named Maersk Line's 11,000-TEU Emma Maersk as 'Ship of the Year'. The ship entered service in 2006 as the world's largest container ship operating on the Asia-Europe route when the vessel was hailed for setting new standards in innovation, environment and safety for both Maersk Line and the shipping industry as a whole. The Emma Maersk's environmentally-friendly features include an advanced energy efficiency system, waste heat recovery system and an electronically controlled engine, which combine to release fewer polluting emissions by reducing total fuel consumption by up to 10 per cent.
Emirates Shipping launches two routes
Emirates Shipping Line has announced the launch of two new services: Gulf Indian Subcontinent Africa (GIA) service and the Africa Far East Asia (AFA) service.
The GIA service offers a direct scheduled weekly service from the Indian Subcontinent and the Middle East to East Africa, providing one of the best transit times to East Africa. The AFA service connects the Orient to the two major ports in East Africa, with one of the best transit times from China and South-East Asia to East Africa.
- The writer is a Dubai-based marine consultant.
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