Bull markets and red flags

Pudong Shipping Week in Shanghai has been a hive of activity with a series of conferences and industry gatherings this week, including the annual meeting of the Global Maritime Forum.

Shipowners, financiers and maritime executives from around the world have been discussing everything from soaring freight rates and stubbornly high new building prices to the challenges of investing in cleaner fuels.

But behind the optimism surrounding strong shipping markets, there are also concerns about how long the good times can last and whether today's investment decisions will pay off in the years ahead.

Our China correspondent Huaqing Ma, who's now based in Shanghai, brings us some of the biggest talking points from the week.

A very high board rate or spot earnings is actually a red flag for us instead of some triggers for us to step into the deals.

High freight rates aren't always good news for shipping investors.

That was Anna Mao of CNB Financial Leasing speaking at the Capital Link Maritime Forum in Shanghai Her concern is that today's exceptionally strong earnings may not last And she wasn't the only one urging caution Here's Maximilian Otto of IG Capital speaking at the same forum.

I think the answer is

who knows.

If you look at many segments, we are in the fourth or fifth year of a strong up cycle.

And if history tells us something, then it's not going to go on much longer.

But even if the shipping boom fades, there's no guarantee new building prices will return to their previous levels.

Pacific Carriers Chief Executive Ho Wing Yu says the economics of shipbuilding have changed.

His group has interest in both ship-only and shipbuilding, giving him a view from both sides.

Shipyards are facing higher labour and energy costs, tougher regulations and increasingly sophisticated vessel designs.

And some of those costs may be here to stay.

and the cycle turns, as many of us in the room here have seen it before, I don't necessarily think that the economics that serve a shipbuilder or a shipowner of the last 10 to 15 years will still hold.

So ship owners face a difficult choice.

Order expensive ships now or wait without knowing whether prices will come down.

But there's another complication.

What fuel should those ships use? At the Global Maritime Forum in Shanghai, I asked International Maritime Organization Secretary-General Arsenio Domínguez whether LNG could receive favorable treatment under a revised net-zero framework.

He didn't give a direct yes or no, but explained why the industry cannot simply abandon LNG.

If we go 10, 15 years back, we were all promoting LNG as the next fuel.

There was the call for investment into the infrastructure.

So we can't just switch overnight.

Pudong Shipping Week in Shanghai has been a hive of activity with a series of conferences and industry gatherings this week, including the annual meeting of the Global Maritime Forum.

Shipowners, financiers and maritime executives from around the world have been discussing everything from soaring freight rates and stubbornly high new building prices to the challenges of investing in cleaner fuels.

But behind the optimism surrounding strong shipping markets, there are also concerns about how long the good times can last and whether today's investment decisions will pay off in the years ahead.

Our China correspondent Huaqing Ma, who's now based in Shanghai, brings us some of the biggest talking points from the week.

A very high board rate or spot earnings is actually a red flag for us instead of some triggers for us to step into the deals.

High freight rates aren't always good news for shipping investors.

That was Anna Mao of CNB Financial Leasing speaking at the Capital Link Maritime Forum in Shanghai Her concern is that today's exceptionally strong earnings may not last And she wasn't the only one urging caution Here's Maximilian Otto of IG Capital speaking at the same forum.

I think the answer is

who knows.

If you look at many segments, we are in the fourth or fifth year of a strong up cycle.

And if history tells us something, then it's not going to go on much longer.

But even if the shipping boom fades, there's no guarantee new building prices will return to their previous levels.

Pacific Carriers Chief Executive Ho Wing Yu says the economics of shipbuilding have changed.

His group has interest in both ship-only and shipbuilding, giving him a view from both sides.

Shipyards are facing higher labour and energy costs, tougher regulations and increasingly sophisticated vessel designs.

And some of those costs may be here to stay.

and the cycle turns, as many of us in the room here have seen it before, I don't necessarily think that the economics that serve a shipbuilder or a shipowner of the last 10 to 15 years will still hold.

So ship owners face a difficult choice.

Order expensive ships now or wait without knowing whether prices will come down.

But there's another complication.

What fuel should those ships use? At the Global Maritime Forum in Shanghai, I asked International Maritime Organization Secretary-General Arsenio Domínguez whether LNG could receive favorable treatment under a revised net-zero framework.

He didn't give a direct yes or no, but explained why the industry cannot simply abandon LNG.

If we go 10, 15 years back, we were all promoting LNG as the next fuel.

There was the call for investment into the infrastructure.

So we can't just switch overnight.