2017 was a year of change. Much of it for the better, but a cautious approach is still needed for 2018 to maintain the progress already achieved, says Mr Peter Sand, Chief Shipping Analyst at BIMCO. An overview:
Economic growth has accelerated in Europe, Asia and the Americas since mid-2016, and the IMF now expects the global GDP growth rate to rise slightly in 2018 to reach 3.7 per cent, up from 3.6 per cent in 2017.
In 2018, the dry bulk sector is likely to improve the fundamental market balance further, if operational speeds do not increase. For the container shipping sector, the improvement in 2017 will carry on into 2018, where fleet growth rate seems to match demand growth, and as a result no big freight rate changes are expected to lift earnings. For oil tankers, there is a potential upside in low fleet growth for both crude oil and oil product tankers. The growth in demand—coming from increased oil consumption and a return of more price arbitrage-driven trading activity—depends on a better-balanced oil market. BIMCO expects that the world’s oil demand will only marginally outstrip the world’s oil supply, and this will be a negative factor for the oil tanker market.
China is at the centre of shipping activity. Being the one driver of dry bulk shipping demand growth, China has also taken a giant leap in hiking crude oil import levels during 2017. By introducing robotics into its enormous manufacturing sector, China aims to remain the world’s top exporter of containerised goods too. There is a lot of competition in that field, and maritime supply chains will change a lot over the coming years, Mr Sand observed.
