Analysts: Ship orders to begin anew in ?11

Analysts: Ship orders to begin anew in Æ11    With the apparent recovery in the container shipping industry well underway, analysts have begun to suggest that container lines will likely begin ordering vessels at some point in 2011.
   Ordering would begin again as soon as the third quarter of 2011, said Philippe Hoelinger, vice president of SeaAxis, at Containerisation International's Global Liner Shipping conference in London in mid-April.
   He said the order book, as a percentage of the existing fleet, hit a peak in 2007 at 63 percent. Historically, the minimum percentage in that ratio is 20 percent, which the industry would likely reach in the third quarter of 2011.
   So Hoelinger is predicting orders will have occurred by that time, 'if nothing dramatic happens until then. The order book by the end of 2010 will go from 4.2 million TEUs to 3.5 million TEUs, and drop to 2.5 million TEUs by the end of 2011. Lines will definitely start ordering in 2011.'
   This week, maritime news service Alphaliner made much the same case.
   'If the present drought of orders continued for another 12 months, the order book could fall to a record low of 9.8 percent by December 2011. During the last industry slump in 2002, a consequence of the dot-com crisis combined with ripple effects of the 1997 Asian crisis, the order book dropped to 17.6 percent before a recovery that saw sustained ordering activity which lasted six years. Going back further to the previous slump in 1999 (aftermaths of the Asian financial crisis), the order book-to-fleet ratio touched 14.6 percent at its lowest point.'
   Alphaliner's prediction is even more aggressive than that of Hoelinger, with the Paris-based analyst saying ship orders could occur as soon as the first quarter of 2011.
   'Alphaliner expects owners and operators to begin to seriously consider placing fresh orders for containerships once the order book ratio goes below 20 percent, which is expected to be reached by the first quarter of 2011,” it said. “There are already signs that some owners are considering the placement of new orders during this year, while prices are still competitive and while yards are more receptive towards new designs.'
   Evergreen Line, the only line among the world's largest to have refrained from ordering new ships in the latest vessel-ordering cycle, said earlier this year it planned to order as many as 100 ships in the near future, though it has yet to place a firm order for any.
   'Apart from Evergreen, it is still unclear which of the major carriers have the appetite and capacity to take on new orders following last year's industry slump which has wiped out about $15 billion collectively from the carriers' balance sheets,” Alphaliner said. “While Evergreen does not have any vessels on order presently, the rest of the carriers in the top 20 all have vessels on order, ranging from 12 percent of the current operated fleet for Hapag-Lloyd to 78 percent for COSCO.' ' Eric Johnson