Jan. 7 (Bloomberg) -- Banks will exert more control over the shipping industry this year as vessel values continue to decline, according to accounting firm Moore Stephens LLP.
Weakening debt-to-equity ratios, financial reorganizations and payment deferrals will help lenders to tighten their grip, Julian Wilkinson, a London-based partner at Moore Stephens, said in an e-mailed report today.
Confidence in the industry recovered as increased scrapping of older vessels in the global fleet curbed a glut of ships that led to falling rates, according to a Moore Stephens survey released Dec. 20. Scrapping is expected to increase in 2013 after deliveries of newly built ships rose to record levels during the last three years, Wilkinson said today.
“There still exists a considerable gap between the volume of newbuilding deliveries coming onto the market and both the amount of tonnage scrapped and the availability of suitable demolition facilities,” he said in the report. “Expect vessel values to fall further in 2013.”
Average confidence in the shipping industry as gauged by the survey rose to 5.6 in the three months ended November on a 10-point scale from 5.3 in the preceding period.
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