According to Bloomberg News, as the largest lender in Scandinavia, the Nordic Union Bank said recently that the shipping industry is expected to recover from the most serious crisis from next year due to the recent rising global demand, the gradual recovery of freight rates and ship asset prices.
Hans Kjelsrud, head of the shipping department of the Nordic Union Bank, said that although the shipping industry will remain in a downturn in 2013, the market situation is expected to gradually improve in 2014. After 2013, the delivery of new ships will drop significantly, and it is believed that the performance of the shipping industry will get better and better after 2014.
The Nordic Union Bank is the fifth largest shipping bank in the world. Although European banks such as Commerzbank of Germany chose to withdraw from the shipping industry at the time of its decline, the Nordic Union Bank still faithfully supported the industry. At present, the downturn of the shipping industry has lasted for five years. The sudden drop in demand and overcapacity caused by the European debt crisis, as well as the low freight rate, the high fuel price and the drop in ship price, have all brought a major blow to the shipping industry.
The Clarkson Sea Index has been an important measure of the revenue of the shipping industry. According to the data of Clarkson, a ship broker, this index averaged 9187 US dollars per day this year, the lowest level since 1990. Clarkson and the Oslo maritime research company Fearnley Consultants also said that the bulk carrier fleet and the VLCC fleet were also experiencing the most serious overcapacity situation since the 1980s. However, Kjelsrud said that with the continuous recovery of the global economy, the shipping industry has shown signs of improvement.
Increase in ship value
Kjelsrud pointed out that the US economy is currently recovering, while the uncertainty of the Chinese economy has also disappeared earlier this year, and the European economy is also rebounding from the bottom. The global economic growth has obviously led to the increase of freight volume, and the increase of freight rate will often promote the increase of ship prices.
According to the relevant data of Clarkson's second-hand ship price, the ship value rose by 2.9% in August, the largest increase since February 2011. According to the data of the Polish Stock Exchange, the price of the Cape of Good Hope bulk carrier with five years of age has increased by 14% to US $33.5 million this year. In 2008, the price of this type of ship was as high as $153.8 million. The ship price has been falling, falling to the lowest level in 10 years earlier this year, only US $29.5 million.
Decrease in loan losses
Kjelsrud said that in the past three to six months, the cost of new ships has rebounded and the value of ships is expected to increase. Based on the bank's observation and analysis, the prices of second-hand ships of most major ship types have bottomed out and rebounded.
The increase in the price of ship assets will help reduce the losses of shipping banks. In the second quarter, the loan losses of the shipping department of the Nordic Union Bank decreased by 15% compared with the first quarter, which was the smallest since the third quarter of 2011. In July, Christian Clausen, the chief executive of the bank, said that the operating profit of the bank reached the highest point in seven quarters, while the loan loss of the shipping business was also further reduced.
DNB, the world's third-largest shipping bank, previously announced that in the second quarter, the loan losses of its shipping, marine engineering and logistics departments were NOK 198 million (about US $34 million). Compared with the first quarter of this year, loan losses decreased by 43%, the lowest in four quarters.
These improvements have led some banks to return to the ship financing market. Kjelsrud said that the financing loans of shipping banks have become more active and the liquidity of the shipping market has become more sufficient. This is crucial to the increase of ship prices. He believed that it was difficult for the ship trading market to operate well without financing. Ship owners need to obtain financing to purchase ships. If there is no financing, the ship trading market cannot be active.