The consensus that shipping thrives on a crisis was broadly agreed on by Chinese companies at TradeWinds Shipowners Forum China on Tuesday.
Bulker owner Hsu Chih-Chien of Eddie Steamship said geopolitical tension between Australia and China had helped the capesize market outperform other bulk segments for the past 18 months to two years.
“This is due to geopolitical reasons, and we saw China diversifying its raw material imports … importing more iron ore from Brazil and bauxite from West Africa where tonne-miles are much longer,” he told the event.
Attacks on ships transiting the Red Sea and draught restrictions at the Panama Canal that caused vessels to route around the Cape of Good Hope have also helped to improve the shipping market. However, Hsu had expected the impact to be greater.
“Severe draught restriction at the Panama Canal should have caused freight rates to go through the roof and not just improved a little, as the canal is very important for trade,” he said.
He compared the draught restrictions at the Panama Canal and the closure of the Suez Canal in 1956, when “many old-time shipowners … made a lot of money”.
“Considering the restriction at the Panama Canal has been over a year now, but the freight rate for bulkers is still poor, while the container ship market has gone up a little due to the recent crisis at Suez Canal.
“I am still concerned about the tonnage supply in the shipping market … it is frightening to imagine what would have happened if Panama Canal did not have the draught restrictions.”
Zhou Bin, chief executive of liner company Zhong Gu Shipping, also foresees an excess supply of boxships when the crisis at the two canals is resolved.
Xu Tao, vice general manager of Shandong Shipping, views the market as unstable, unpredictable and beyond shipowners’ control.
“What is important in the shipping cycle is for one to seize the opportunity when the market is down, and vice versa,” he said. “One must stay alert and practise flexibility.”
