1970-01-01 08:33:28
The global shipping industry needs confidence and patience to deal with the challenges facing the sector brought about by the financial crisis, business leaders said at the 2008 World Shipping (China) Summit in Dalian.
"The global shipping market is in a panic now," said Wei Jiafu, president and CEO of COSCO Group, quoting the Baltic Dry Index, which slumped from 11,793 on May 20 to 1,102 on October 24.
Wei said the industry is hurt as demands for containers, dry bulk, and oil tankers are being reduced. OPEC has announced to cut production, while some Chinese steel mills also have chosen to cut their output.
"Container's traffic volume for 2008 as a whole is now projected to be 5.5 percent less than the 2007 traffic volume, with no turnaround expected in the next six months," he said.
Wei was echoed by others at the summit, which is considered the world's most influential shipping forum and attracted top players of the global shipping community.
The market is significantly affected by the financial crises, said Mark Long, Head of Global Shipping at HSBC.
"Nobody can predict when it will recover," Long said.
"Periodic fluctuation is not uncommon in the shipping market," said Xu Zuyuan, vice-minister of the of transport.
Xu suggested all business players cooperate in order to reach a win-win situation and a sustainable development trend in the slumping market.
"The panic will be over in months. But worries will still be there. We need confidence to recover," Wei said.
According to Wei, there are many positive factors for the further development of the shipping industry. Governments of giant economies like the United States, European nations, Japan, and Russia are taking measures to bail out companies. The Chinese economy keeps growing steadily and the shipping demand remains strong.
"Global dry bulk volume is projected to grow by 5.2 percent in 2008, and 3.5 percent in 2009," Wei said.
China's oil tanker demand is still strong. Its crude oil import reached 140 million tons in the first three quarters of 2008, with a year-on-year increase of 8.8 percent. The figure is expected to reach 180 million tons at the end of the year, he said.
Wei said the challenge could also be a chance to optimize the structure of the industry. With orders of bulk ships being cancelled, single-hull tanker being phased out, and speculation leaving, the shipping capacity will be strengthened.
Source:China Daily