'Many ship orders unlikely to be fulfilled this year'

OSLO: New ship deliveries in the depressed dry bulk market will be below expectations this year and vessel scrapping will remain high, providing the sector some relief, shipping executives said last Wednesday.

Many of the ship orders on the books are unlikely to be fulfilled because either the operator or the ship builder is defunct or close to it, the executives said, adding that extremely low charter rates would squeeze more ships from the market.

"About 10 per cent of the order book is rubbish," Lasse Kristoffersen, the chief executive of ship owners and operators Torvald Klaveness Group told a conference.

The dry bulk sector has been in a deep depression for years and ships being launched now were ordered during the boom years before the global financial crisis.

Firms are struggling just to survive as spot charter rates are below US$5,000 (RM15,550) per day for the large, capesize class ships, well below break even levels and just a fraction of rates in excess of US$100,000 a day in 2007 and 2008.

The global fleet is scheduled to grow by over 100 million deadweight tonnes this year, well over 10 per cent, but Kristoffersen predicted that the actual figure would be closer to 65 million to 70 million dwt. Reuters