Projections in Shipping Capital Sources

Due to an editorial error, charts 2, 3 and 4 of the article, “How Quickly Circumstances Change,” were labeled incorrectly (MM April 1-15, 1995). Because information on projected capital supply is so valuable, however, we’ve reprinted charts 3 and 4 and added a further chart which combines Citibank’s two capital supply projections into one graph for comparison’s sake.

The charts depict the dynamics between capital supply and demand – breaking total demand of some US$17-20 billion per year into four market sectors: cruise, liners & miscellaneous, dry bulk tankers and tankers. Supply is divided into private debt and K/S, public equity, public debt, banks and shipyard credit. Historically, banks and shipyards credit have made up the lion’s share of capital supply – $16.5 billion in 1994. At the beginning of last year, Citibank projected that this trend would continue, suggesting however that shipyard credit at $8 billion would outstrip bank finance by $2 billion and, with private debt coming on strong, providing $3 billion – or half the bank lending level of $6 billion. The average projected supply total was $19.5 billion for 1994-97.

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