2011 was generally a year of recovery for the car carrier industry, even though the tragic earthquake and tsunami in Japan and flooding in Thailand presented significant setbacks.
Looking to 2012, we are cautiously optimistic, although concerned about the uncertainty, particularly in Europe. We see industry volumes moving in the right direction and a repricing in several trade lanes that is necessary to bring rates closer to a sustainable level.
There are, however, definite grounds for caution because of the financial uncertainty in Europe and the United States. In addition, the strong value of the yen will lead to reduced exports from Japan, traditionally the largest export market for deep-sea operators.
We anticipate the limited ordering of new ships to continue, as freight rates still do not justify the cost of new vessels and the uncertainty in the market deters operators and tonnage providers from making investment decisions. There are, however, vessels in that were ordered before the Lehman crisis, and with the deliveries that will come this year, we expect a slightly overtonnaged market.
The orderbook is rapidly decreasing, and unless there is a significant and long-lasting meltdown in Europe, we believe in a tighter market from 2013.