TT CLUB - Container shipping to recover by end 2011
HSH Nordbank said that container shipping will recover by end 2011. Also, the current growth in container capacity is lagging behind the rising demand, thereby generating an opportunity for an even faster recovery. HSH Nordbank's Global Head of Shipping Harald Kuznik said, "The current development is not only driven by restocking, but by a rebound in consumption. We expect that container shipping markets will be well-balanced by the end of 2011 or early 2012."
However, given its state bailout, HSH will have to significantly cut its balance sheet. Presently, 41% of its USD 41.6 billion (EUR 34 billion) shipping book is in relation to container ships. Mr. Kuznik said, "I do not see that HSH will finance new container vessels to a noteworthy extent in the years to come. We are the market leader in ship financing, but it is clear that Asia will gain importance as a centre for the industry," and added that "intra-Asian trade is the growth engine for worldwide container trade."
Asian banks like Bank of China, Export-Import Bank of China and Japan's Mitsui are likely to expand their ship financing and benefit from the restraint having to be shown by banks like HSH Nordbank and NordLB.
According to Mr. Kuznik, the growth rate of the container shipping market can reach pre-crisis levels in 2010 due to the strong Asian development. However, the container shipping capacity is expected to rise by only 6% due to the deferments and cancellations of new vessel orders by some shipping firms. Mr. Kuznik said, "Forty-five percent of new container capacity to be delivered in 2009 was deferred to later years, and 60% of ships ordered for 2010 will come later." Slow steaming will further add to the effect as it ties up vessels for longer times.