Shipping today, although supposedly in deep crisis, is in reality still wallowing in cash after one of the best years in its history. This is the conclusion of Martin Stopford, Clarkson’s research boss, writing in the firm’s latest weekly report. Although the Clarksea index hit a new all-time low of $7,500 a few days ago, the last 12 months is still one of the most profitable on record. Since its peak - $50,381 a day last May, the index has lost about $1,000 each week. However, the 12-month rolling average of the index, which covers the tanker, bulk carrier, gas and containership sectors and is therefore a good reflection of the industry generally, is still at $26,000 a day, admittedly down from its 2008 peak of $38,950, but still not far below the previous all-time peak of $30,000 in May 2005. “From a financial point of view, these numbers tell us that recession is in the industry’s mind, not its pocketbook,” Stopford says.
No wonder, he says, that the queue of potential investors looking for bargains is finding a disappointing absence of desperate sellers. In fact, he says, at this stage in the game, after five years of record profits, it would require a special talent to be running out of cash! There are disappointing implications for demolition, however, Stopford believes. Although 10m dwt of ships was scrapped during the first quarter of the year - compared with 12.6m for the whole of 2008 - this momentum is only likely to be maintained based on fears about the future, rather than financial hardship at present.
No wonder, he says, that the queue of potential investors looking for bargains is finding a disappointing absence of desperate sellers. In fact, he says, at this stage in the game, after five years of record profits, it would require a special talent to be running out of cash! There are disappointing implications for demolition, however, Stopford believes. Although 10m dwt of ships was scrapped during the first quarter of the year - compared with 12.6m for the whole of 2008 - this momentum is only likely to be maintained based on fears about the future, rather than financial hardship at present.