Shipping Market Outlook Q2 2024: Trends In Tankers, Bulkers, Containers, And Gas Industries

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  • The shipping industry faces a turbulent quarter ahead in 2024, with factors such as China’s economic instability, elevated interest rates, geopolitical tensions, and potential disruptions in key shipping canals creating an unpredictable market landscape.
  • This forecast explores how these uncertainties may affect different shipping sectors: tankers, bulkers, containers, and gas industries.

Tankers

Tankers are likely to experience continued volatility in rates due to fluctuations in oil prices and geopolitical influences. The impact of Russian sanctions and OPEC+ decisions could influence crude imports and refinery runs, impacting activity in the sector. The market is also seeing increased tanker ordering, while tonne-mile demand expectations remain strong for 2024 and beyond, with a potential boost from vessels avoiding the Red Sea.

Bulkers

The bulker market anticipates modest growth in demand surpassing low supply growth, paving the way for a strong market balance. Canal disruptions and vessel rerouting have added upside potential, increasing tonne-miles. China’s investment in green energy and the opening of the Simandou iron ore mine in Guinea may reshape the iron ore trade and sustain demand. Coal demand may peak this year but is expected to remain steady.

Containers

Container demand is expected to grow by 3.1% annually from 2024-2027, with a forecasted growth of 2.4% in 2024. Container rates are expected to bottom out between late 2024 and early 2025, before rising again as normal conditions return. The market will face a supply surplus due to the entry of nearly 9 million TEUs. Scrapping activity is expected to increase, influenced by CO2 emissions regulations and the EU ETS.

Gas

US LPG production is forecasted to grow at a slower pace in 2024, with moderate exports due to terminal expansions in late 2023. VLGC deliveries are expected in 2026 and 2027, although they may initially load LPG instead of ammonia. Earnings may see a correction in 2024 due to modest US production growth and increased domestic consumption. Stress on transits through the Panama Canal may cause seasonal variations, with recent drought impacting future transits. Asian demand for LPG is projected to see slight growth in 2024, while trade patterns in the ammonia market and ethylene shipments remain stable.

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Source: Vessels Value