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Clarksons: Shipping dodges credit crunch

London: Despite global turmoil in the money markets, shipping has remained remarkably unaffected by the credit crunch ?" at least so far. Quite the opposite: one year on from the credit crunch, Clarkson says shipping has enjoyed booming markets since the crisis started on August 10th last year. Its Clarksea index is averaging $38,000 a day, easily a record. And compared with the way shipping responded after the two previous financial crises ?" the Asia crisis in 1997 and the Dot Com crisis in 2000 ?" "this is an astonishing change of behaviour", the analysts write in their latest weekly report.

So far, the credit crisis has hardly touched world manufacturing, says Clarkson. "The Pacific economy was growing at 10% a year ago, and today is still growing at 8%, hardly a significant difference." The Atlantic is shakier, however, with industrial production in June slipping into the red. But the analysts point out that the three-month average is not much worse than in 2004.

In contrast, both Atlantic and Pacific industry collapsed in 2000, with the Pacific crashing from 10% growth in 2000 to -0.1% a year later. One reason for the difference, Clarkson suggests, could be that the Dot Com crisis hit personal investors as stock markets crashed. "This time the credit crisis is contained within the banking and property sectors, both of which move slowly."

For shipping, the Atlantic slowdown is putting pressure on world oil demand, which is expected to grow by 0.8% this year, down from 2m b/d at the height of the boom. But the freeing up of refinery capacity "has turned the products market on its head," says Clarkson, with backhaul cargoes on the North Atlantic, for example, as US refiners export surpluses and keep the market tight. Meanwhile Chinese trade has been unaffected and at mid-year, their 80m tonne steel production growth target was being met. The only sector to be hit so far is the container market where trade has fallen eastbound on the trans-Pacific and, just recently, on the all-important Asia Europe trade.   [18/08/08]


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