Question

explain the four shipping markets and discuss the relationships that exist between them

Answer 1

The four shipping markets are :

1. Newbuilding market – The new building market brings new ships into the shipping industry and sends cash out of the market as materials, labour and profit. The newbuilding market is trading ships that are not yet built in other words the ship’s keel may have been laid.

2. Freight market – Freight market is one where ships are being chartered (used for transportation). Freight contract where the shipper buys transportation from ship-owners at a fixed price per ton of cargo.

3. Sale and purchase market – It is where ships are being sold to other ship-owners. The participants in this market are a mix of shippers, shipping companies and speculators and shipbrokers who play an important role in dealing with transactions.

4. The demolisation market - It is the recycling market of the shipping industry. This market can be compared to the sale and purchase market, but the difference here is that the buyer is a demolition yard and not a shipowner. When a ship-owner is no longer able to sell a ship S& P, they will turn to the demolition market

The relationships between these markets can be seen from the definitions that all the markets are interlinked and show the different stages in the life of a ship.