VesselsValue: Top 10 Ship Owning Nations 2018

2018-02-02 09:46By： xinde marine news

VesselsValue: Top 10 Ship Owning Nations 2018

Greek
Greek owners remain the dominant force in global shipping. The current value of their owned fleet stands at almost exactly $100bn, putting the country at the top of the table. The value is concentrated in the Tanker ($36bn), Bulker ($35.75bn), and LNG ($13.5) vessel types. Hellenic control of these markets stands at about 19% of the total worth of the fleets.

The earnings environment for most tanker markets will remain challenging through the rest of 2018 as the supply of ships is outweighing the rise in global demand. The low rates should encourage the scrapping of older units, setting up the groundwork for a market recovery. A moderation in fleet growth and the faster than expected rise in global consumption should boost rates in 2019 though. The low rates should drive the sale of assets from financially weak owners, which could lead to the acquisition of more tankers by well positioned Greek owners who can bargain hunt in preferred segments.

The weakness in the tanker markets is offset by the rising tide in the dry. Increasing valuations for dry bulk ships may push the total Greek owned valuations above the net of the tanker markets. Stronger cashflow levels should help boost the balance sheet of diversified owners.

The stark rise in LNG carrier day rates is a surprising boost for the third most valuable class of ships. Global demand for clean burning natural gas is moving sharply upwards, a trend that it is hard to imagine reversing.
The strong commitment of Greek owners to the global shipping markets looks unlikely to change as others, such as Germany, are liquidating assets. The trend in Chinese ownership is rising, as state owned companies are consolidating and placing new orders. This is a reminder that there are always new challengers for the throne of peak market value. Greek owners, with their sharp focus on commercial results, should continue to lead the pack for the foreseeable future.

Japan
Japanese companies are the second largest group of shipowners by value but remain in the same league as Greece. The country’s interests in the Dry Bulk and LNG segments are on par with the leader, but it does not have as much exposure to the tanker markets. Japanese refinery capacity has been falling since the late 2000’s, a trend that will continue as the country faces stiff competition from other Asian refiners. Japanese tanker owners continue to trade in the global markets, but growth will not come from domestic demand.

Japan is the top owner of LNG vessels by value, which is a strong strategic fit for its energy needs. Nuclear power remains under high scrutiny, and additional plants may shutter in the years ahead. This leaves natural gas and coal as the top alternatives for power generation. The high ownership of Dry Bulk and LNG vessels make the trading fleet well suited to match domestic consumption. Japanese ship builders remain highly competitive, and most orders placed by owners are in their home country yards.

China
China is nipping at the heels of the two countries that place above it in terms of total owned value. The stratospheric rise of the country’s economy since 2000 has had impacts on all shipping and commodity markets. The growth trajectory has slowed recently but remains a positive force for ton mile demand across all vessel types.

Ownership of tankers and bulk carriers are on par with Japan, but there are fewer LNG carriers, and a greater emphasis on container vessels. This dovetails with the intense usage of dry commodities such as iron ore and coal, and the focus on a consumer goods export driven economy.

The Chinese share of global ownership should continue to move upwards over the next decade across all markets. The large amount of crude oil that is imported into the country is moving on an increasingly national fleet. This trend, combined with rising product exports should boost the number of tankers that come under owner’s umbrellas.

Chinese shipyards continue to claim a significant portion of the global orderbook, and now is in the top three choices for construction with the longstanding leaders, Japan and Korea.

United States
US shipping interests are focused heavily on the offshore industry, tankers, and container industry. A significant of this value is generated by the steep prices for US built units able to work in domestic trade. Foreign flag vessels cannot move cargoes from one US port to another due to Jones Act restrictions. The concentration in tanker ownership is not as negative as it is for internationally flagged units. The Jones Act tanker market has rebounded from the high $20k/day range in 2017 to its current market levels around $50k/day.

Offshore units should rebound in value over the next several years as oil price increases are expected. This will lead to more employment opportunities in the US Gulf and off the coast of Mexico. Bulker and container valuations should boost States based owners as the year progresses.

Singapore
The fall from the top three maritime countries of Greece, Japan, and China down to the fourth and fifth place is significant. The total valuation of Singapore based owners is about $45bn, much lower than China’s $81bn stake. Singaporean ownership is spread more equally across market niches than many others. This reflects the diversity of trade which moves through the gateway to the far east.Singapore has moved up in the rankings, climbing from sixth place last year to their current position rounding out the top five.

Norway
Norwegian interest in the global shipping markets is firmly connected with the oil markets, particularly upstream exploration and oil field services. Both of these markets have seen a sharp contraction following the oil price decline in 2015 and the continuing rise of inland production. However, the oil price rise that began in mid-2017 is now causing renewed interest in the offshore markets. This is beneficial for Norwegian owners as it should lead to a rebound in depressed valuations for offshore assets.

Norwegian shipyards are particularly dependent on the offshore industry as well. A rise in activity would boost repair work as units return to service, and will eventually lead to new orders, helping the country’s domestic yards. Norwegian owners have a large exposure to the oil tanker markets though, which are facing a rough year ahead.

Germany
German owners are focused on the container and dry bulk markets, which account for about ¾ of their total holdings. Dry bulk asset values are recovering, while some classes of smaller container vessels are as well. Post Panamax container ships are likely at the floor level for pricing, and may see a rebound upwards as rates stablise. 2018 could be another very active year for sale and purchase activity as the earnings environment will remain low for container ships, but there is upside for asset values. This should drive owners with a weak balance sheet to sell, while opportunistic buyers with access to financing should be anxious to jump on the bargain pricing.

German based financing for shipping is starting to dry up as market participants are leaving the market or consolidating. European banks have faced mounting losses from their shipping books from 2010 onwards, and they appear to be losing their patience in waiting for a significant market recovery. Asset values remain close to or well below their median range from 1992 to the present in most market segments. Asset values rebounded in some markets, but it is likely that most are driven by capitulation of lenders seeking to leave the market for good.

United Kingdom, South Korea, Denmark
These countries holdings are diversified across many segments rather than one specific silo. This reflects a historical and current commitment in these countries to the maritime industry.

South Korean shipyards remain the largest in the world, but national owners have a smaller position. Investor fatigue in the country following financial difficulties of highly visible companies will probably reduce market exposure to the maritime industry.

The UK has a strong position in gas carriers, which is a plus from the LNG side, but a drag due to soft LPG markets. The unexpected increase in spending on North Sea projects could boost UK based owners positions in the offshore markets.

Denmark (read Maersk) is committed to the top tier of container vessels as it seeks to control market share on the primary shipping lanes for containerised cargoes. Valuation for these large ships is low, and although there probably isn’t much downside at this point, it is too early to call for a significant upswing in ULCV ships.

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VesselsValue: Top 10 Ship Owning Nations 2018

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