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THERE
is a wealth of information available throughout
the container shipping industry in terms
of supply and demand projections. The only
trouble is that a number of these forecasts
appear to be at odds with each other.
A
cursory glance of some of the market's leading
authorities on the topic of supply and demand
growth reveals some agreement at times,
but at other times there are some rather
surprising discrepancies.
Let's
first look at some of the "crystal-ball
gazing" on supply growth this year...
 click image
to enlarge
In
the latest edition of Containerisation International
(CI) it states that is "expected"
that supply will grow between 6.5 per cent
and 7.5 per cent.
BIMCO,
on the other hand, are predicting an increase
in supply of around 14.5 per cent, before
taking into account the anticipated level
of vessel scrapping in 2013. After vessel
scrapping BIMCO is forecasting an increase
in supply of approximately 12 per cent.
This
is between 4.5 per cent and 5.5 per cent
higher than the rate forecast by CI.
Clarkson
Research Services and Drewry Maritime Research
enter the picture at either ends of the
CI-cited projection range.
Clarkson
suggest an increase in supply of 6.5 per
cent and Drewry expect a 7.5 per cent increase
this year.
On
the demand side, this is where we really
begin to see some variances.
CI
offers us a rather broad growth estimate,
stating that it is "generally believed"
that demand will grow between 5.5 per cent
and 7.5 per cent year on year. So we see
even within the one forecast there is very
little clarity.
If
there is 5.5 per cent growth in demand then
we are looking at a potentially substantial
supply overhang of anywhere between one
and 6.5 per cent, based on the supply projections
presented above.
If
7.5 per cent is the more accurate projection,
then supply and demand would presumably
be balanced, or there could even be a supply
shortage - that is of course assuming that
the BIMCO supply growth projection is grossly
inaccurate.
Clarkson's
analysts favour the more conservative demand
growth estimate of 5.4 per cent, while Drewry
is even more conservative at just 4.5 per
cent.
Alphaliner
also believes that demand growth will be
conservative this year, but it too presents
us with a new number to ponder with an estimate
of five per cent.
Naturally,
predicting demand is not easy. But shouldn't
there be a more standardised way of addressing
these projections, both for supply and demand?
This
would certainly help clear up what is essentially
a very foggy outlook today. Based on the
above projections we are potentially looking
at supply growth of 12 per cent versus demand
growth of just 4.5 per cent.
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