Half-year outlook 2024
The growing orderbook and rising prices are not deterring cash-rich owners or hungry yards as all core markets continue to perform strongly at the same time and the global disruption fuelling record tonne-miles shows no sign of abating. But is it really different this time round?
Shipping’s short-term outlook looks golden, but uncertainties loom large
The growing orderbook and rising prices are not deterring cash-rich owners or hungry yards, as all core markets continue to perform strongly at the same time, while the global disruption fuelling record tonne-miles shows no sign of abating. But is it really different this time round?
Containers: Generation [bo]X — tales for an accelerated cycle
The container shipping sector entered the year on a downcycle. It looks likely to end the year in the black, as the old nemesis of congestion comes back to haunt
Shipbuilding: Newbuilding prices edge up but no return to 2000s-style supercycle
Shipbuilders face continuing labour shortages, local currency depreciation and greater complexity in vessel specifications at a time of increasing demand for new vessels. Nevertheless, government support can be assured for the few nations that still view merchant shipbuilding as a strategic industry
Ship finance: Debt margins drop as owners slash leverage
It does not make sense to have both high spot exposure and high financial leverage in a highly cyclical business like shipping. Owners of bulk commodity ships have finally gravitated to a low-leverage model that affords more sustainable break-evens on a through-cycle basis
LPG: Sailing towards summer stability?
Freight rates for VLGCs have recovered from winter lulls, and while the potential for further upside remains limited, they should remain profitable
Regulation: IMO carbon price negotiations to set the scene
MEPC82 is set to be a pivotal meeting that will determine the direction of travel for key emissions-reduction measures to take shipping closer to net zero in 2050
Tankers: Good times roll into 2025
Western sanctions against Russia and the Red Sea turmoil have recalibrated oil trades twice in two years to offset slowing oil demand growth that typically steers tanker freight rates
Dry bulk: Panama upside to fall, Guinea upside to rise
Supply chains for dry bulk shipping have been lengthened by weather and geopolitics. At least some of that tonne-mile upside could unwind during the second half, as Panama ramps up canal transits. On the demand side, China remains the big wild card
Marine insurance: Baltimore is game changer for rates
Sector faces potential exposure up to $3bn but will not know for certain for years to come. That’s little comfort to underwriters making pricing decisions in the here and now
LNG: Challenging freight rate environment expected to prevail
According to Gibson analyst Matt Coates, the rate environment is likely to remain challenging for the remainder of 2024, and stay below 2023 and 2022 levels
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