Ship finance gathering highlights overwhelming order book

Ship financier Paul Slater spoke recently at a Lloyd’s Shipping Economist finance gathering.

During the meeting, Mr. Slater said that the present global order book was overwhelming and that the present fleet was already 25 percent larger than required.According to Mr. Slater, “reckless owners” spent some US$750 billion on new build contracts in the five years leading up to 2008, with US$500 billion still on order; not very many contracts have been cancelled and far more have been deferred. He added that yard capacities were not declining as Chinese yards have been filling deferred spaces with new local orders for Chinese owners with cargo contracts to industrial groups. Mr Slater foresaw that this would create an enormous negative impact on the dry cargo markets and said that it would delay the market’s recovery by several years

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