Bimco predicts challenging markets in 2016

Bimco predicts challenging markets in 2016

In his email Peter Sand, chief shipping analyst at shipwoner body Bimco, wished recipients a happy new year. His market predictions contained within the message are anything but happy.

For dry bulk, Bimco expects the supply side to grow by around 2% this year, compared with an estimated growth of 2.6% in 2015. This will be helped by what Bimco predictds will be a new record level of scrapping. On the demand side, dry bulk growth is forecast to remain level.

“Challenging market conditions in China will be likely to affect the level of risk,” Sand noted in his market forecast.

For tankers, Sand suggested the significant building of oil stocks in 2015 may slow tanker demand growth somewhat in 2016.

Bimco expects Iran’s return to the crude oil export market in 2016 will disrupt current trade patterns.

“As Iran rebuilds its market share, it will seek to take the place of neighbouring and West African competitors in supplying European and Asian markets. Time will tell if this will also bring higher tanker demand, but Bimco does not expect that to happen,” Sand wrote.

Bimco expects the crude oil segment to see a fleet growth of around 4.5% in 2016, compared to an estimated 2.3% growth last year.

“As the demand side growth is unlikely to reach the same high level, downward pressure on freight rates will follow,” Sand warned, adding he expects similar conditions in the product segment too.

For containers, Bimco anticipates 2016 will be another tough year.

“Last year did not ease the imbalance as more than 1.6m teu was delivered in 2015. After a record for new capacity entering the market in last year, 2016 is set for a much lower influx at around 3.5%. This is not sufficient and means the challenging market conditions for container shipping will extend for another year,” Sand concluded.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

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