Hellenic shipping companies are refraining from placing any new building orders for almost seven months now, in an attempt to limit potential oversupply of vessels, at a time when financing is scarce and the freight markets’ prospects appear grim, together with the global economical environment.
‘In its latest new building report, shipbroker George Moundreas & Co. commented that this development is normal, since the perception of a huge number and volume of the global orderbook hinder any thought of owners heading back at shipyards. Indeed, the report once was full of contracted vessels, up to 40 on a monthly basis, especially during 2006-2007 with bulk carriers proving the most popular. The report also states that most banks appear reluctant to finance such new deals. The problem that the market faces is the lack of information regarding the number of order cancellations, or delays in deliveries. Both ship owners and shipyards are silent, since nobody is to benefit from that kind of publicity. Of course, this isn’t the case for publicly-traded companies, which are obliged to report such agreements. So, what can be said with some degree of certainty, regards contracts with no financing backing, as well as that a respectable number of containerships which the market can’t handle. The report says that the market is headed towards some form of balance, though through slow and painful processes. This combined with some freight market upswings could lead to a normalization of the current troublesome picture.