Shipping faces two more years of hardship

Shipping markets face at least two more years of strife as newbuildings stifle rates, Tor Olav Troim says. John Fredriksen’s lieutenant also feels the time is not yet right to pick up bargain vessels in the second hand market.

In an interview with the Financial Times newspaper, Troim says dry-cargo rates have now risen to a level the group can “live with” but he is still fearful of the large orderbook. He said: “Without wanting to shoot ourselves in the foot, we’re not too optimistic about the prospects in the next couple of years. “We have to absorb the tonnage that is ordered and we have to go back to a world that is in growth again.”

Troim was also cautious about the tanker market, explaining that oil consumption has declined to a level in line with that seen between 2000 and 2004, but there are now 100 more VLCCs in the market. Falling charter markets have hit vessel values, especially on the dry-cargo side, but Triom says Fredriksen will not be rushing out to splash the cash just yet. “I think we feel it’s a little too early,” he told the newspaper. “We’re careful with our shipping investments.”