News

Concerns over ‘Eco-ship’ Splurge

2013-05-20
2334

A global research group, Barclays Research has pointed out a growing concern over ‘Eco-ship’ ordering trend ongoing around the world, disproving advantages of placing orders for eco-ships.
The analysis firm said that eco-ship ordering will eventually extends the overcapacity problem and cut the value of vessels being operated.
The vessels known as having fuel-efficiency feature in the past are now regarded as ‘gas guzzlers’, thus eco-ships which are ordered due to its fuel-efficiency characteristic will be also treated as old-fashioned by the time when other new fuel-efficient vessels are introduced.
Moreover, it pointed out that financial institutions keep increasing their support with ship finance, encouraging shipowners to place more orders to reduce their financial difficulty on top of expected benefits from low yard prices and economical fleet. This ultimately will bring chronic overcapacity followed by other financial troubles going forward.  
While some market players think that the eco-ship trend is just one-time thing, others claim that fuel-efficiency has always been an issue over the past few years due to increasing fuel costs.
There is growing concern that owners will keep investing in newbuildings because of the market condition while shipbuilders claim that newbuilding orders are for better fuel-efficiency, which is actually groundless because every newbuilding must be constructed in line with the Energy Efficiency Design Index (EEDI) which is a requirement to regulate CO2 emission from shipping.

Source:Asiasis