On November 8, 2010, the “2010 SISI/KMI International Forum – Hotspot and Outlook of 2011 Global Shipping Market” organized jointly by Shanghai International Shipping Institute (SISI) and Korea Maritime Institute (KMI) was successfully held in Wyndham Grand Plaza Royale oriental Shanghai.

The Forum brought together well-known experts and scholars in China and South Korea as well as industry professionals, to jointly analyze the development of shipping in the two countries or even in the world. From a professional perspective, the Forum involved in-depth discussion and analysis on three traditional markets, i.e. container liner shipping, tanker and dry bulk markets, and an emerging market – Northeast Asian cruise market, with an aim of promoting the development of relevant industries in both countries, assisting governments in correctly predicting future tendencies, formulating right policies, and creating favorable investment environment.

Venue of “Hotspot and Outlook of 2011 Global Shipping Market” Forum

At the opening ceremony, Kim Hak-So, President of the KMI; Huang Youfang, Vice President of Shanghai Maritime University; Xu Peixing, Member of the Standing Committee of Shanghai Municipal CPPCC Committee and former Director-General of Shanghai Municipal Port Administration; and Kim Jung-Ki, South Korean Consulate General in Shanghai addressed the Forum, expressing cordial expectations for a successful convocation of the Forum.

The Forum consisted of speeches and discussions. Four experts from China and South Korea analyzed and forecasted the container, tanker, dry bulk and cruise markets, respectively, before hearing comments from anther four guests of the two countries.

Kim Hak-So, President of KMI, delivered the opening speech

Huang Youfang, Vice President of Shanghai Maritime University, made a welcome speech

Xu Peixing, Member of the Standing Committee of Shanghai Municipal CPPCC Committee, made a congratulatory speech

Cheng Juehao, Associate Professor and Deputy Director of SISI Cruise Economy Institute conducted an in-depth analysis on the status quo and future development of Northeast Asia cruise. He believed that, along with the eastbound shift of global cruise market and the rapid booming of cruise tourism market in Asia-Pacific region, the cruise markets of China, Japan and South Korea are undergoing the early stage of development. From the perspective of future development, the markets of southern Japan and South Korea may keep running short-haul routes for several years. The likely emergence of local cruises in China will accelerate the development of regional markets among cruise destinations, leading to the needs for market differentiation and segments. With the strong impetus by the cross-strait tourism market, Taiwan will bring development opportunities to the cruise terminals in Shanghai, Xiamen, Zhoushan, Guangzhou and other ports. Among others, the large-scale trend, policy issue, outbound travel on holidays and charter operations will also speed up the development of China’s cruise market.

Lim Zhongkuan, Director of Maritime Industry Research Division of KMI, analyzed the situation of tanker shipping market. He held that, unlike container ship and dry bulk markets, the tanker shipping market will experience an extreme depression in 2010. Given the foregone conclusion of serious overcapacity, whether an increase will be witnessed in oil consumption becomes the key determinant of tanker shipping market. For emerging economies experiencing a surge in energy consumption, changes in crude oil imports will be of particular concern. For this reason, Mr. Lim put forward the strategies for enterprises to respond to the development of oil tanker shipping market. He stated that the holding of capacity shall be increased when the profitability reaches its lowest point, while the holding of goods rather than capacity shall be ensured when the expected bottom time has been delayed.

Zhang Jieshu, Professor and Deputy Director of SISI Modern Logistics Institute, reviewed and forecasted the international dry bulk market. In 2010, the international shipping volume of dry bulk cargoes, especially iron ores, rose significantly on a YoY basis. The price of coking coal posted a strong rise, while that of thermal coal remained relatively stable. Based on the analysis of 2010, it is estimated that the dry bulk shipping volume will continue to pick up as pushed by the rising trade volume. China’s iron ore imports will become a highlight in the future development; coking coal shipping volume will also rise somewhat; and minor bulk shipping trade will climb back gradually. The shipping capacity of all ship types are expected to maintain a rapid growth, with the delivery of new vessels remaining high. The excess capacity will translate into growing pressures in 2011, and the imbalance between supply and demand will still exist. In general, the overall market will remain weak and sluggish for a period of time.

Kim Woo-Ho, Director of KMI Shipping Market Research Center, predicted the development of the global container market. He believed that the container market in 2010 has been restored to the pre-crisis level, but the container ship orders revealed subtle signs of recovery or rise. After riding out the supply/demand downturn in 2011, the container shipping market showed a rebound. In contrast with the increase in goods volume, the capacity rise was relatively slow. In order to tide over the market depression, shipping enterprises tended to slow down their sailing fleets. However, the delivery of above 8000-TEU container ships will continue to escalate in 2011-2012. It is therefore imperative to get prepared for the blowout of shipping capacity after 2011.

After hearing four experts analyzing and forecasting the four markets, Director Wang Chuanxu of Shipping Management and Logistics Decision-Making Institute of Shanghai Maritime University, Director Hwang Zhenhui of KMI Shipping Policy Research Office, Gu Jiajun from Shanghai Ship and Shipping Research Institute of  the Ministry of Transport, President Li Chengyuan of STX PanOcean, and Manager Gu Yunfeng of Information Department of Shanghai Shipping Exchange communicated and exchanged thoughts on relevant markets with the four speakers.

Discussion session of the Forum

The Forum was successfully concluded with good responses from participants. After the Forum was rounded off, industry professionals conducted active exchanges, revealing a better understanding about the anticipated development of global shipping in 2011. The Forum provided good opportunities for enterprises and research institutions for mutual exchange and learning.