MARKET NEWS

EMF Weekly 22

2 weeks ago

TankerS

OPEC+ to increase supply from 2025, while BIMCO publishes favourable tanker outlook.

Last week, BIMCO, a global trade association for shipowners, ship operators, and shipping brokers, released its May 2024 tanker outlook. In short, BIMCO project demand for tankers to outpace supply in 2024, in part driven by revised projections for re-routing to avoid Houthi vessel attacks to extend into 2025. BIMCO estimate that avoidance of the Red Sea and Gulf of Aden is adding around 7% to global tanker ton-miles, and 4% for global product tanker ton-miles.

The sanctions on Russia also add ton-miles to the industry; BIMCO estimates the effect at +3% to tanker ton-miles, taking geopolitical diversions to a combined 10.2% above 2022 levels. This helps explain the ongoing strength in the tanker market, particularly when combined with ongoing global oil demand and supply growth, and limited tanker vessel fleet growth.

Markets also gained insight to future oil supply following the OPEC+ meeting, where the group of oil producing nations agreed to extend their supply cuts for the remainder of 2024. However, the group did signal that they will increase the oil supply by 1.46m b/d from 2025, with a further 2.2m b/d of excess capacity, which could come back online in the future.

$ 0 /day

Aframax ECO, 12 months TC

$ 0 /day

Aframax, Average spot

$ 0 /day

Suezmax ECO, 12 months TC

$ 0 /day

Suezmax, Average spot

Source: Clarksons Research

Dry Bulk

Bulk markets mixed with capesize rates moving higher.

Capesize rates rose last week, driven by strong activity on the Dampier (Australia) – Qingdao (China) route. The Atlantic market remained steadier, despite a late push in the South, with the tonnage list for Brazil and West Africa still relatively lengthy.

“China leading demand for capesize vessels higher, while panamax and handy segments see rates fall.”

In the Atlantic, Panamax rates fell as vessel supply increased, while the Pacific market was quiet despite good cargo flow. For Handy vessels, rates also declined, despite tonnage leaving the oversupplied US Gulf region. The Pacific softened due to slow Indonesian coal inquiries and weak Indian Ocean sentiment.

$ 0 /day

Capesize, 12 months TC

$ 0 /day

Kamsarmax, 12 months TC

Source: Clarksons Research

car carrier

Reopening of the Port of Baltimore supports PCTC volumes.

The Port of Baltimore has led to reduced PCTC volumes since the Key Francis Scott bridge collapsed in spectacular fashion in March 2024 when a Maersk container ship collided with it. The port, which is a key terminal for vehicle exports in and out of the US, has since become accessible to PCTC vessels once again. With the PCTC market undersupplied and running at full capacity, greater volumes can positively impact earnings, and the reopening of the Port of Baltimore removes a key hurdle discussed during PCTC owner Q1 earnings calls in recent weeks and months.

The Car Carrier segment continues to pivot towards green vessels as the growing number of electric vehicle (EV) cargoes also ramps up scrutiny of the environmental impact of the vessel segment. The PCTC market can be influential in driving ESG improvements in the wider shipping market, with the leading Norwegian PCTC owners Hoegh Autoliners and Wallenius Wilhelmsen focused on vessels with duel-fuel capable engines.

$ 0 /day

5000 CEU – 12 months TC

$ 0 /day

6500 CEU – 12 months  TC

Source: Clarksons Research

Tankers

Indicative TC (1 year)
Type Tons + /-
VLCC
Suemax
Aframax
MR
Indicative Values
Type Resale 5y 10y
VLCC
Suemax
Aframax
MR

Dry Bulk

Indicative TC (1 year)
Type Tons + /-
Capesize
Panamax
Supramax
Handysize
Indicative Values
Type Resale 5y 10y
Capesize
Panamax
Supramax
Handysize

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