An Analysis of the Global Shipping Markets
Abstract
In this globally competitive and volatile shipping industry, it is supported by the four significant shipping markets. Although these markets possess different business characters, they may share the same trading players, i.e. the ship owners. Hence their activities are closely correlated. (Stopford 2009)Any fluctuations or changes in sentiments will affect the cycle of the markets. Based on the article by Reyes, B. (2013), „Scrapping activity slows to a crawl‟ in Lloyd‟s List, this paper aims to discuss the relationship between the two of the significant markets- the new-building and demolition market, looking into how the two markets affect one another and why ship breakers are losing interest in taking in vessels at higher rates. Finally, the paper will touch on the trends in the ship demolition markets mainly located in Bangladesh, China, India and Pakistan.
Introduction The new-building and demolition market are very different in terms of economic structure. (Stopford 2009) Both markets directly affect the supply of vessels. Throughout the years, there are fluctuations in the both markets. These fluctuations are part of the mechanism in attempt to adjust the supply to the ever changing demands in the world trade. As reported in the article by Reyes, B. (2013), demolition market was observed to be critically slowing down. It can be said that the volatility of the shipbuilding market contribute to the plunge in the scrapping activity to a large extent and the market trends in the developing countries such as India, Bangladesh , China and Pakistan. Relationship between new-building and ship demolition market The new-building market plays a more vital role in the supply capacity adjustment and it is closely linked to the freight market.(Nguyen 2013) The supply capacity of the building market will in turn affect the demolition markets that take in old ships that no longer have profitable value and purposes. For example, if freight market is good which
In this globally competitive and volatile shipping industry, it is supported by the four significant shipping markets. Although these markets possess different business characters, they may share the same trading players, i.e. the ship owners. Hence their activities are closely correlated. (Stopford 2009)Any fluctuations or changes in sentiments will affect the cycle of the markets. Based on the article by Reyes, B. (2013), „Scrapping activity slows to a crawl‟ in Lloyd‟s List, this paper aims to discuss the relationship between the two of the significant markets- the new-building and demolition market, looking into how the two markets affect one another and why ship breakers are losing interest in taking in vessels at higher rates. Finally, the paper will touch on the trends in the ship demolition markets mainly located in Bangladesh, China, India and Pakistan.
Introduction The new-building and demolition market are very different in terms of economic structure. (Stopford 2009) Both markets directly affect the supply of vessels. Throughout the years, there are fluctuations in the both markets. These fluctuations are part of the mechanism in attempt to adjust the supply to the ever changing demands in the world trade. As reported in the article by Reyes, B. (2013), demolition market was observed to be critically slowing down. It can be said that the volatility of the shipbuilding market contribute to the plunge in the scrapping activity to a large extent and the market trends in the developing countries such as India, Bangladesh , China and Pakistan. Relationship between new-building and ship demolition market The new-building market plays a more vital role in the supply capacity adjustment and it is closely linked to the freight market.(Nguyen 2013) The supply capacity of the building market will in turn affect the demolition markets that take in old ships that no longer have profitable value and purposes. For example, if freight market is good which
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