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Tankers The tanker orderbook is growing, but still remains historically low. A total of 232 tanker orders have been placed this year, according to Xclusiv Shipbrokers, with orders placed this year making up 50% of the orderbook. During the first eight months of 2023, 57 aframax/LR2s, 69 MR2s, 40 suezmaxes and 11 VLCCs have been ordered. This compares to 20 aframax/LR2s, 31 MR2s, two suezmaxes and three VLCCs ordered in the same period of 2022. “It is more than obvious that the steadily healthy tanker rates along with the low orderbook have aroused interest for more tanker newbuildings,” Xclusiv noted in a recent report. Clarksons Research data shows tanker ordering this year is up 66% on the 2022 total with tanker owners finally playing a game of newbuild catch-up. Despite the belated orders tankers remain a relatively rare sight at the world’s shipyards still. Clarksons data shows tankers make up 25% of the existing global merchant fleet in gt terms but just 9% of the orderbook, having been elbowed out by boxship and gas orders. Dry Bulk Dry bulk misses the covid days when ship queues were common. Today, despite the Panama Canal drought problems, fleet inefficiencies for the sector have hit record lows, according to Breakwave Advisors, who described the markets this week as muted and rangebound. “The dry bulk market seems to operate in a very streamlined and efficient manner, with effective supply now even higher than in the pre-covid years,” Breakwave noted. The one area making headlines this month for bulker queues has been the Panama Canal, but even here the worst looks to be over. In tandem with increased grain chartering activity from east coast South America, sub-capesize markets found support earlier this month from a build-up of mainly geared bulker tonnage waiting to transit the canal owing to low water levels. Braemar reports that waiting times for bulkers averaged 3-4 days in August 2022, whereas the figure for this month currently stands at 11-12 days. Source: Braemar Containers Is that it? Has the peak season peaked already? Many analysts suggest it has. Looking at US retail spending, even though retail spending has held up even as inflation cools, sales across major retailers have been uneven. While Amazon, Walmart and TJX reported strong Q2 numbers, others like Macy’s and Dick’s Sporting Goods did not fare as well and are seeing possible signs of a slowdown in consumer strength. “While a recent analysis shows US retail inventory levels are decreasing, they remain elevated, and, together with slowing sales, will likely push off a significant restocking cycle and freight rebound until mid-2024.Taken together, these trends support projections that import volumes likely reached their peak for the year in August,” noted Judah Levine, head of research at Freightos. According to Maritime Strategies International (MSI), the inventory destocking process in the US has been much slower than generally expected, especially in the wholesale sector which has been facing decreasing sales. “This is the main reason why the peak season will likely be muted on the transpacific,” MSI stated in a recent container report. “It’s a shipper’s market this peak season as rates stabilise at below pre-covid levels and capacity is abundant. Prices are low and this offers a great opportunity for exporters this peak season,” said Christian Roeloffs, CEO of Container xChange. Nevertheless, analysts at HSBC argued that with spot freight rates now settling above the contract rates, the industry should remain in the black this year. “Having said that, we expect 2H profitability to sharply reset to a more normalised level,” HSBC warned.

Analyst Abstract

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