SMM 2012 is awaiting a record attendance in a demanding economic environment while international shipbuilding obviously has to take a break
European debt crisis, a weak US employment market, declining growth rates in emerging economies such as China and India – prospects[ds_preview] for the global economy are not exactly bright at the moment. These are the challenging coordinates for the decision-makers of the maritime industry as they get ready to gather for the 25th SMM (»Shipbuilding, Machinery & Marine Technology International Trade Fair Hamburg«).
Record participation at SMM
»Under these challenging economic conditions it is especially important for companies to remain in close contact with their customers«, says Peter Bergleiter, Business Unit Director at Hamburg Messe und Congress (HMC). »As SMM celebrates its 25th anniversary, we can proudly announce record fair attendance.« The Business Unit Director is expecting more than 2,000 exhibitors this year. With more than 90,000 m2, exhibition floor space is likewise at an all-time height.
Order book decreases significantly
Shipbuilding does not remain unaffected by the slowdown of the world economy. After shipyards had reported an unprecedented production record in excess of 100 mill.GT in 2011, overcapacity and dropping ship prices should be expected for the coming years, states Martin Stopford, CEO of the shipping intelligence network Clarkson Research. »Shipyards cannot sustain the present production output beyond 2012«, he says. Production would drop to 94 mill. t this year and to 70 mill. next year.
This is reflected in the global order book: According to current figures published by Clarkson, orders shrank to 5,142 ships totalling just over 100 mill. CGT (Compensated Gross Tons) during the first quarter of 2012, following a 2011 year-end level of 6,313 vessels (123.2 mill. CGT). While 1,254 ships worth roughly 25.4 mill. CGT were delivered from January until June, only 485 new orders totalling 8.8 mill. CGT were received during that period. Market segments still reporting strong demand include offshore supply vessels (135 orders worth just over 1 mill. CGT) and LNG tankers (18 orders totalling 1.5 mill. CGT).
Light at the end of the tunnel
There are positive signs in other segments as well: While charter and freight rates in the containership segment continue to be under pressure, the current inactive fleet, according to Lloyd Intelligence, comprises 264 vessels with a combined capacity of 383,000 TEU. This is equivalent to 2.4 % of the global fleet, only half of what it was in late February. Factors promising some relief on the supply side include the increasing number of units scrapped.
»We estimate 100 to 130 containerships to be scrapped worldwide by year’s end«, says Hermann Ebel, CEO of the German shipowning company Hansa Treuhand. In the face of rising fuel costs and stricter environmental requirements imposed by international standards, the future belongs to technically advanced, efficient ships. Strong financial performers such as the German Schulte Group or the British shipowning company Zodiac have begun taking advantage of the low newbuilding prices. Furthermore, Maersk Broker has reported numerous ongoing negotiations on larger units. Most experts expect supply and demand in the containership segment to level out in 2013/2014, thereby prompting a considerable increase in charter and freight rates.
Attractive segments
Meanwhile, the shipbuilding and supply industries are discovering new fields of activity: »We are successfully working global markets by tapping into new client groups and market segments«, says Dr. Christian Schliephack, Vice Chairman of the Board of the German industry association VDMA’s shipbuilding and supply division as well as Managing Director of ship transmission manufacturer Reintjes. »While our existing customers are ordering very few new ships at the moment, we are receiving more orders in the offshore as well as the retrofitting and service segments.«
Forecasters believe an annual global market volume of 200 bill. $ to be realistic in the medium term. »The energy demand, in particular for offshore oil and gas as well as offshore wind, offers huge opportunities for
the maritime industry«, confirms Ah Kuan Seah, Vice President of the environment solutions group of the US classification society ABS.
Being well prepared for the future is crucial: »Globalisation will continue, and there will always be plenty of cargo needing to be moved«, says Clarkson CEO Stopford. And more than 90 % of that volume will continue to be transported by the international shipping business – with increasingly efficient, environment-friendly ships.
Highlights
The 25th SMM is under the patronage
of German Chancellor Dr. Angela Merkel. The highlights of the maritime trade fair in Hamburg include:
• gmec (»Global Maritime Environment Congress«), offering a forum for international experts to discuss current environmental challenges and solution concepts;
• the SMM Ship Finance Forum hosted by HMC jointly with the »Financial Times Deutschland«, a platform discussing topics of ship finance;
• MS&D (»International Conference on Maritime Security and Defence«);
• SMM Offshore Dialogue, where industry experts will discuss oil and gas production at sea as well as offshore wind energy.
Trade visitors from all parts of the world can also look forward to an extensive supporting programme with more than 150 programme items.
