The Maritime Cyprus 2015 Conference, a Conference of a worldwide range, organised for the fourteenth time since its inception in 1989, was continued on the 16ths September in Limassol for its third day and successfully reached its completion. The large attendance proves once again its vast importance and reputation as a global shipping Conference..
The discussion was focused on the subject “Shipping “New World Order” and was divided into two parts, the first one examining “Geopolitical Developments v. Shipping” whereas the second inquired into “Markets “Oracle”.
The first discussion relating to “Geopolitical Developments v. Shipping” was moderated by Mr. Julian Bray, Editor – in – Chief, TradeWinds. The group of panellists consisted of Mr. George Lakkotrypis, Minister of Energy, Commerce, Industry and Tourism, Republic of Cyprus, Mr. Andrew Hampson, Managing Director, Asset Backed Investments, Tufton Oceanic Limited as well as Mr. John B. Richardson, Special Adviser, FIPRA International. The aim of the discussion was to examine how the geopolitical developments affect shipping. In particular the discussion sought to identify the factors of the current and prospective world stage which would influence the industry as well as the trends in shipping.
Mr. Lakkotrypis stressed the tremendous potential for positive developments in the shipping industry due to the discovery of hydrocarbons in the Eastern Mediterranean. The exploration of hydrocarbons and the development of offshore installations not only provides the Republic of Cyprus with emerging opportunities but could also act as a catalyst for dialogue and regional cooperation.
In addition to the above, while it was stressed that it may be impossible to predict the future of the world trade, it was speculated that trade flows between Europe and the Far East will likely remain stable, while trade between China, India, Indonesia, Korea and Japan will develop increasingly complex patterns. In addition, it was suggested that the potential accelerated and internally generated growth in Africa (“Africa rising”) due to the efforts made for the improvement of infrastructure and governance in Africa, could be a geopolitical game changer, as well as of other emerging markets, including Indonesia and Mexico. The expansion of the Suez and Panama canals were also believed to affect shipping in a positive manner. Other economic factors would include the property and stock exchange threats faced by China and the parallel growth in India, inter alia, in terms of dry bulk supply and container volumes. With respect to world politics, it was suggested that where the deterioration of relations between Western countries and Russia would not substantially hinder trade, it could potentially affect the development of the Northern Sea Route through the Arctic Ocean. Similarly maritime disputes between China and neighbouring countries could possibly lead to the closing of sea lanes and economic sanctions, but would not substantially affect trade. More importantly as other influential factors were pointed out the dealing with carbon emissions, the latest developments in oil production as well as the banking stability and availability of liquidity. It was suggested that the reduction of carbon emissions may prove out influential in view of the foreseeable conclusion of an agreement at the upcoming UN Conference of Climate Change in Paris, which would lead to the upgrading of the shipping lines’ fleet and could prove detrimental to companies struggling to fund such investments. In respect of the oil production, it was expressed that the continued pressure from KSA (Kingdom of Saudi Arabia) to keep oil production high while maintaining low prices, the recent additional oil capacity from Iran due to the relaxation of restrictive measures, as well as the release of the NITC fleet into the international market, the potential of US light crude and the instability in oil producing nations in view of the ISIS activity and generally the insecurity in Middle East, with particular emphasis to the Syrian crisis, were also thought to be substantial game changing factors.
The second discussion inquired into “Markets “Oracle””. Moderator of the discussion Mr. Themis Papadopoulos, President of the Cyprus Shipping Chamber. The group of panellists consisted of Mr. John Bamford, Managing Director, Sale & Purchase Department, Simpson Spence Young Ltd, Mrs. Katharina Stanzel, Managing Director, INTERTANKO, and Mr. Peter Sand, Chief Shipping Analyst, BIMCO. The discussion was focused on the current market trends and the outlook for the bulk, tanker and container sectors. It was agreed by the panellists that forecasting seems to have become inherently more challenging especially after the witnessed global economic crisis since 2008 and the latest worrying property market and stock exchange developments faced by China. Moreover, the tonnage over-supply and the big increase in ship building capacity were also discussed in view of the non – remarkable demand growth evidenced in the past years, and whether this would lead to a rebalancing of demand-supply in the forthcoming years.
In concluding, trade in raw materials was agreed to have become unpredictable, as supply and demand fluctuates at considerable levels, making the forecasting process much more challenging. The panellists suggested that with a contraction of the container, tanker and bulk markets globally, tone- miles do count. The only way to improve the freight market could be to control the supply of vessels given the fact that the shipowners do not have any control over the demand side.