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A year of recovery

A year of recovery

Singapore: It is amazing how much difference a year makes. At the beginning of 2010 three of the most written about topics in shipping remained as they had for the previous year: lay-ups and newbuilding cancellations and delays.
Standing atop Singapore's latest iconic landmark of Marina Bay Sands the other week looking out across the Singapore Strait it was clear the number of ships out on the anchorages was at a much more normal level than a year ago when ships cluttered the horizon to an alarming level. The number of quay cranes that could be seen pointing skywards at the container terminals of PSA was also greatly reduced.
At the beginning of 2010, over 10% of the world's container shipping fleet was still laid-up or idle, and the picture was equally grim in other sectors such as car carriers and product tankers. The outlook for shipbuilders looked bleak with very few newbuilding orders in 2009 and no obvious prospect of this picture changing. Financing even existing orders also remained a serious issue.
Overall though 2010 turned out to rather better than expected. Container shipping positively roared back, powered in part by the ever growing intra-Asia trades. A better than expected turnaround was also reported for ports as a result.
Dry bulk shipping, while volatile, continued to be driven by Chinese demand for raw materials. More surprisingly shipbuilding enjoyed a bounce back in new orders as owners rushed to take advantage of lower prices, in particular for bulkers, with the kamsarmax leading the charge. Chinese banks also stepped in to fill the financing gap left by western institutions.
Not all sectors have had such a good year and crude and product tankers saw rates dropping below operating costs, prompting some to simply pull back from the market.
As we head into 2011 it is clear Asia will continue to be the driving force of the shipping recovery and this is what we will be keeping you updated about in Seatrade Asia Online for the year to come.

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