Ship owners are aswim in profits and primed to spend

Oct 01, 2008 | 06:49 AM |

When steel producers are bullish on the strength of a given market segment, customers typically run for cover, knowing that producer optimism means higher prices for steel. Often times, customers are unwilling to pay those high prices.

Today's shipbuilding market doesn't fit into that category.There is a great need for vessels, and ship owners are placing orders at high levels. Even rapidly rising steel costs haven't dimmed their enthusiasm. Orders are being placed even though plate prices in the United States have risen to more than $1,400 per ton, up more than 100 percent this year.

"Driving all the new building orders is a super-strong dry cargo freight market for the last four years," said Matthew I. DeLuca Jr., chairman and chief executive officer of Mid-Ship Group LLC, a Port Washington, N.Y.-based ship broker and supply chain manager. "Most people involved in the segment—charterers, owners and brokers—believe that with the rapidly expanding middle class in China, India and Brazil, the market is expanding and demand is increasing dramatically. ....

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