New Value Orientation of Shipowners’Investment

By Li Cheng

Ever since the financial crisis,there have been remarkable changes in the structure of shipping and shipbuilding market,and there have been some new features and trends in shipowners’ investment in new ships. Of the global investment in new ships,the European shipowners take the first place in the areas where the world’s leading shipowners are located,accounting for 50% of the ships under construction. Asian shipowners take the second place,and in Asia,the growth rate of shipping investment is second only to Europe,accounting for 30% of the ships under construction.

In 2009,Greece,Italy,Germany and Belgium are the first four nations in Europe in terms of investment in new ships. Since 2006,there has been rapid increase in the investment by Greek shipowners,and Greece took the fi rst place as opposed to the third in 2005. During the same time when the other nations were raising interest rates to cool down the economy,investment in new ships by Greek shipowners was continuing to increase. The amount of capital invested in 2006 reached $20b,three times the amont of 2005. In 2007,the total investment was $37.8b;in 2008,the investment in new ships by Greek shipowners decreased sharply,reaching only $18.7b,whilst in 2009,although the investment decreased by 90% compared with that of 2008,the amount of capital invested in ships under construction at the end of 2009 was the largest in the world.

Before 2006,the investment in new ships by Japanese shipowners was in the fi rst place in the world. In 2004,the investment by Janpanese shipowners accounted for 19%of the global investment in ships; in 2006,the investment in new ships by Japanese shipowners reached $20.6b,accounting for 12.4% of the global amount. Since and after 2006,the investment in shipbuilding by Japanese shipowners has decreased continuously. As the result of concerns about the future of the market,in 2007 the total investment was $14b; in 2008,the number was $10.1b,and in 2009,the amount of investment by Japanese shipowners decreased by even a remarkable rate.

In 2009,China (mainland),Hong Kong (China),Korea and Japan ranked the first four in investment in new ships by Asian shipowners. The investment amount in this area decreased by 84% compared with the same period of 2008.Of which,the capital invested by Japanese shipowners suffered the greatest fall of 97%. Chinese shipowners also slowed down the pace and showed a decrease of 76%.

The rapid development of the economic entities as China,India and Russia stimulates the demand for the primary products like fossil fuels and industrial metal,which in turn benefits greatly the material export nations in the Middle East,America and Africa. Meanwhile,many emerging countries have turned from indebted countries to creditor countries,and have accumulated large sum of foreign exchange reserves,such countries will have more investment and trade. At present,Asian banks,particularly Chinese-owned banks,are beginning to orient themselves towards the world shipping financing market and this is seen by someone as the clear signal that the voice of shipping is shifting to the east. In the coming two years,special focus should be given to the potential powerful force of the Chinese domestic market .

In recent years,the investment in new ships by American shipowners has always been the fi fth in the world,and in 2007 this investment was very remarkable with $18.5b,and with luxury cruise ships and offshore engineering vessels as the main areas for investment. However,in 2008 and 2009,the investment by American shipowners suffered a serious decrease as the result of financial crisis.