The Autumn 2024 edition focusses on key trends from third quarter and explores potential market developments in the short to medium term.

Mixed Fortunes and Volatility: After a broadly strong Q2 for all the major sectors, Q3 was a mixed bag for each sectors and the segment within. Container freight rates reached their peak in early Q3 before declining to May levels by the end of the quarter, but time charter rates have remained stable, meaning 2024 is likely to end up being a very strong year for the sector. Whilst relatively flat, drybulk earnings fared slightly better on average apart from Panamaxes which fell 15% QoQ, this Panamax weakness has persisted into Q4. Crude tankers were volatile due to conflicts in the Middle East, and VLCCs reclaimed the top spot in terms of segment performance, outperforming Aframaxes and Suezmaxes. Product tankers faced increased competition from their crude counterparts cleaning-up, resulting in significantly lower earnings compared to Q2-24, although they remained at heathy levels.

New Layer of Uncertainty: the upcoming Trump presidency is clouding the geopolitical and economic landscape, as well as shipping markets, but whether his pledges come to fruition is highly uncertain. The likely first and most obvious sector to be hit will be containers, with higher tariffs unleashing a front-loading rush ahead of their implementations but ultimately but will ultimately cripple overall container trade volumes later on. For tankers, Trump may consider easing drilling regulations, but any increase in US oil production will primarily hinge on market forces such as price and demand, the latter being particularly weak in China. Meanwhile, stricter sanctions on Iran could boost demand for conventional crude tankers, a number of which have been carrying substantial amounts of clean product cargo over the summer. The drybulk sector is more insulated, with Brazil poised to pick up any loss in US grain cargo volumes. However, in the long run, a weakened Chinese economy could limit the potential for increased commodity demand.

Not a bazooka: the Chinese government’s recent stimulus measures which mainly started in September, were intended to stabilise the property market and address local government debt. Whilst beneficial, they are not expected to have a noticeable impact on the economy until 1H25 at the earliest. The pressing focus on fixing past issues rather than stimulating future growth highlights the complex challenges the Chinese economy is facing. China may also delay further policy action until the US reveals its trade policy in 2025, as the timing and severity of potential tariffs remain uncertain.

Build, Baby, Build: Container ordering continued to be robust in Q3, with 117 vessels of 1.5m-teu ordered, this is the second highest quarterly ordering since Q2-22. Q3 orders have supercharged the 2027+ orderbook, pushing up the orderbook to fleet ratio to 25% from 20% at the end of June. Contracting in other sectors was more contained with the exception of the Panamax/Kamsarmax segment in drybulk. 

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