Seatrade Maritime is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Ghost of 2001 box downturn looms: UBS

Hong Kong: Shipping related stocks have had a rough week based on the severe decline of the Baltic Dry Index. Now it is container shipping's turn to be hit hard. Investment bank UBS has downgraded the sector outlook from neutral to negative.

"We expect most carriers to achieve minimal profitability with considerable risk of losses. In addition to high fuel prices, we expect demand to continue to deteriorate and believe carriers will suffer from higher unit costs as excess supply of larger vessels drives load factors down," the bank said in a hard hitting report out this week.  "The considerable challenges the industry faces in 2008-09E lead us to draw comparisons with the downturn in 2001-02," UBS maintained.

Friday was another shocker of a day for shipping stocks, most notably in Korea where Hanjin Shipping shares nosedived 10.49% to 23,900 won. Newswire Yonhap also reported how local shipyards were rattled on reports that steel price hikes could increase overall production costs. No. 1 shipyard Hyundai Heavy Industries dropped 3.91 percent to 221,000 won and second-ranked Samsung Heavy Industries fell 4.96 percent to 27,800 won. [5/9/08]




Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish