Chem shipping fears force of global financial crisis

13 October 2008 16:49  [Source: ICIS news]

LONDON (ICIS news)--The global financial crisis could have a serious impact on the chemical shipping industry, shipping brokers said on Monday.

“The impact of the financial crisis could lead to fewer new buildings, cancelled orders and less transport,” one broker said.

Confidence was still weak in the shipping industry despite recoveries in some stock markets, with one Baltic broker saying that it foresaw the problems mostly affecting the US and China.

“Product prices are mainly dropping in the US and China and I have heard several Chinese buyers having problems getting laycan [period the charterer allows to carry out loading and/or discharging operations].

"Some Chinese receivers have to pay the bank in full in order to get laycan, which means that they have to pay for something that has not been resold, leaving no possibility to buy product,” he said.

Small-to-medium-sized ship owners were also vulnerable, according to brokers.

“The case of Svitoid Tankers proves that the industry is becoming more difficult for smaller to medium sized owners to operate in,” another source said.

Svitoid Tankers said last week that it had employed two financial advisers to help save the company from liquidation.

“Ship owners are nervous and credit lines could come under pressure in the very near future”, one broker said.

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By: Dan Horlock
44 20 8652 3214

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