Tonnage Oversupply to Remain an Issue during 2018
Those who predicted that 2018 would be yet another challenging year for the tanker market, after a dismal 2017 as well, haven’t been far off. In fact, as shipbroker Charles R. Weber reiterated in its latest weekly report, things could very well stay that way for quite some time. In its latest analysis, the shipbroker said that “crude tanker earnings have commenced 2018 at seasonal lows not observed in decades as a large, ongoing newbuilding program continues to undermine fundamentals.
Shipping Finance Deals at 11-year low
The fall in shipping deals witnessed since 2014 continued into 2017 as reported deals were valued at an 11-year low of US $28.9 billion. Investor sentiment remains weak as the total value of shipping deals in 2016 fell 40% year-on-year. Institutions continue to exit the shipping space as market fundamentals pressure the earnings environment, reducing investor returns. However, we do note that the emergence of leasing companies has increased the allocation of capital by “other debt” participants to 36%.
VLCC Surplus in the Middle East Set for Reduction in the Coming
A looming fall in VLCCs’ availability in the Middle East over the coming weeks could help boost the freight rate market in the weeks to come. According to the latest weekly report from shipbroker Charles R. Weber, “VLCC rates moved broadly higher this week as participants reacted to a narrowing Middle East availability surplus that materialized during January’s last decade loading program.
Small Bulkers in High Demand
Newbuilding activity picked up over the past week, while in the S&P market, the main focus has been dry bulk carriers of the smaller size-segments. In its latest weekly report, shipbroker Allied Shipbroking said that “following the relatively slower flow of activity in the Newbuilding market noted the week prior, things seemed to be warming up slightly again, with a flurry of fresh orders being reported these past couple of days.