In the first part of a five-part series, the Seatrade Maritime Podcast delves into the performance of shipping markets in the first half of 2024 and the outlook for the rest of the year with insights from Adam Kent, Managing Director of Maritime Strategies International (MSI), reports Seatrade Maritime.
Macro-Economic Environment
Adam Kent highlights that economic growth has accelerated in the first half of 2024, which is a positive indicator for the shipping industry. However, he notes that while the Purchasing Managers’ Index (PMI) for manufacturing and services has been in positive territory, recent PMI data shows some weakening. The US economy is expected to slow down, and while China has shown stronger performance compared to 2023, its construction sector remains weak, and there are concerns over structural issues and escalating US-China trade tensions.
Shipping Demand and Supply
MSI projects a 2% growth in seaborne cargo demand for 2024, with all sectors contributing to this growth. This marks the first time in four years that all shipping sectors are experiencing positive growth. On the supply side, the shipyard order book extends three to four years, limiting the immediate impact of new contracts. The supply outlook for tankers and bulkers remains positive.
Impact of the Red Sea Crisis and Geopolitical Events
The Red Sea crisis has significantly influenced shipping markets, with increased ton-miles and diversions around the Cape of Good Hope to avoid Houthi attacks. The impact varies by sector, with some sectors avoiding the Suez Canal. Despite these challenges, combined with other positive market factors, shipping earnings, and vessel values have seen significant growth compared to last year, with earnings in some sectors reaching their highest levels in 15 years.
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Source: Seatrade Maritime
