Moore Stephen’s partner Richard Greiner predicts that oil prices will continue to rise, there will be more calls to scrap ships, and the costs of meeting regulatory requirements will become clearer in 2017.
Looking to 2017 Greiner noted that making predictions about shipping was about as volatile as the industry itself. “Who, for example, predicted that the Baltic Exchange would be sold to Singapore?”
“Predicting shipping’s fortunes in 2017 is as precise a science as foretelling the English weather. But some things are at least more likely to happen than not,” he said.
“Oil prices should continue on an upward trend on the strength of the recent OPEC production cuts.
“Calls for higher levels of ship demolition will increase significantly, although not ship demolition itself.
“The cost of meeting regulatory requirements will become clearer as the industry and its financiers grapple with the financial consequences of having to burn lower-sulphur bunker fuel whilst ensuring that their ballast water management systems are fit-for-purpose” Greiner forecast.
He also said that more newbuildings would be ordered or some shipyards would go bankrupt, freight rates would struggle to reach levels that allow commercial viability, and consolidation would remain key for container shipping. Cyber-security would also move higher up the agenda.
As to what will not happen Greiner stated: “Things that will not happen in 2017 include another major fall in oil prices, and a big increase in hull insurance rates. Leicester City will not win the Premier League.”