Shipping recovery unlikely until 2014, says CIMB

The downward spiral underway in global commodity shipping rates won't improve much until 2014, when a better balance between new capacity and demand should clear the decks for a modest recovery, according to CIMB research in Hong Kong, Market Watch reports. In spite of record ship deliveries in 2011, the number of cargo vessels under construction is equivalent to about one-third of the existing global fleet, CIMB's Hong Kong-based analysts said on Monday. There's little that shipping lines can do to improve the situation in the short term, CIMB said, adding that they did "not expect a huge volume of demolitions, given the relatively young fleet." In a related development, Japanese shipping line Mitsui O.S.K. Lines Ltd. -- the world's biggest operator of crude-oil supertankers by vessel number -- will scrap five large tankers, saving an estimated at $20,000 to $30,000 a day per tanker to idle the vessels, according to a report Monday by the Nikkei newspaper. The shipping line said it didn't want to sell the vessels, as such a move would do little to ease the overcapacity problem.