It will take three to five years for world shipping to absorb tonnage coming from the yards, and the time it actually takes will depend on how many old ships can be scrapped and how many orders for new ones can be cancelled, said Tom Kim, a Hong Kong-based shipping analyst with Goldman Sachs.
"Asia/Europe rates are stabilising. There was a rebound in the second quarter that was given back. Initial data suggests that the third quarter may rebound," said Mr Kim in an interview with Newark's Journal of Commerce.
"Transpacific rates are still declining, as we have been expecting."
Overall, he said that by mid-2010, Goldman Sachs expected that the supply/demand would return to balance, as excess capacity is removed from the market.
"We assume that all of the Asian-listed shipping companies we cover to remain going concerns, if banks continue to provide credit. We cannot comment on the other major privately held operators due to lack of disclosure."
Tracey Jia
