Category: Shipping News

06-04-2018 China soybean tariffs unlikely to hurt shipping, says AXIA, By Dale Wainwright, TradeWinds

China’s move to impose tariffs of 25% on US soybean imports is unlikely to impact the dry cargo market, a leading analyst has predicted.

“We do not believe that the tariff will meaningfully impact the drybulk shipping markets,” said AXIA Capital Markets’ Clinton Webb.

“Producing only around 12.9mt of soybeans domestically, China is the world’s largest importer with volumes of 95.1mt or 60% of global imports.

“Although Brazil and Argentina are likely to increase their soybean sales to China as a result of increasing prices spurred by tariffs, American soybeans exports cannot be fully substituted.”

Webb says that in the event that all of Brazil’s soy exports were to go to China, there would still be a deficit that the rest of the world would be unable to fill in the near-to-medium term.

“Even in such an unlikely outcome, the results would likely be neutral to the dry bulk freight markets,” he said.

“Voyage times from the USGC or Brazil to China are both ~40 days according to our calculations, rendering ton-mileage demand largely unchanged.”

Webb added that while escalating US-China tariffs were expected, it was surprising that China elected to include oilseed.

The product is the US’ largest agricultural export to the country, totaling 32.9mt or 34% market share, and was worth around $14bn last year.

“Taking a cue from the European Union, the measure is a targeted policy aimed at President Trump’s electoral base,” suggests Webb.

“Eight of the ten largest US soybean producing states voted for Trump in the 2016 election.

“However, soy is predominantly used as animal feed. And, a 25% tariff would likely increase Chinese food prices. Hence, it is surprising that China would risk price increases in its food supply.”

04-04-2018 Owners hope sunshine can win the day, By Max Tingyao Lin, Lloyd’s List

In our Spring Outlook market series, we find most participants are taking a glass half-full approach. The improved confidence is based on easing oversupply; with owners prioritising their spendings on meeting new regulations over newbuildings, the recovery story may really turn out to be true this time.

When considering whether their glass is half-full or half-empty, most shipowners seem firmly on the optimistic side. For now.

When analysing the main sectors of cargo carriers, the Lloyd’s List Spring Outlook series found the upbeat mood that materialised in 2017 could potentially last well into this year.

There have been some worries about global trade wars initiated by Washington and new regulations, justifiably, but the general consensus seems to be that supply-demand balances are improving.

Many shipowners are feeling the sunshine, having seen freight earnings on an upwards trajectory in some main sectors over the past few quarters.

The latest Moore Stephens survey found shipping confidence at a four-year high. Shipowners’ optimism is mainly based on easing oversupply.

Take the container and dry bulk shipping sectors, which are most vulnerable to any new China-US trade barriers, for example.

Even as there are demand-side worries, the boxship orderbook is at less than 13% of current fleet and net growth of the global bulker fleet this year is likely to be the lowest in a decade. For many, that is enough to keep freight recovery firmly on track.

But there are also the consumption-side stories that bulls can point up.

Consolidating its status as fuel of the future, liquefied natural gas is seeing its use undergo rapid expansion. Related seaborne trade requirement is being boosted consequently, not least because of rising Chinese imports and US exports. This is widely expected to be the star performer this year, with analysts continuing to adjust their forecast earnings upwards.

As with LNG, demand for liquefied petroleum gas has also been driven by growing environmental consciousness in emerging markets over recent years. But it is also aided by rising petrochemical feedstock use in China.

Placing those factors alongside the booming US shale output and exports, some are hoping the LPG shipping sector will turn a corner later this year.

There are also signs of recovery in crude and petroleum products shipping markets, which have been plagued by large newbuilding tonnage lately.

Yes, the Organisation of the Petroleum Exporting Countries will cap output for much of the year as the global de-stocking process continues, undercutting cargo flows. But fleet growth is slowing and could fall even further if more owners of aging ships assign them to the scrapheap because of weak earnings.

Against this rosy outlook, investors should take careful note that shipowners tend to be their own worst enemies. With newbuilding prices still low and an improving appetite among financiers, it is not out of the question that newbuilding orders will soar in droves and derail any recovery in a year or two.

Fortunately, owners have to prioritise their spending to meet the International Maritime Organization’s new regulations in ballast water treatment and bunker fuels.
On this occasion, it is perhaps the regulators who are bringing out the sunshine.

02-04-2018 AXIA raises bulker rate forecasts with ‘clear runway’ until 2020, By Andy Pierce, TradeWinds

AXIA Capital Markets has jacked up its dry cargo rate forecasts amid the belief demand will continue to outpace supply growth in the coming years.

Analyst Clinton Webb raised his forecasts for capesize, panamax and supramax bulkers for 2018 and suggested improved rates awaited shipowners in each of the sectors in 2019.

“We believe that last year was just the first part of a drybulk recovery,” he said in a report.

Dry bulk shares have been flat this year after a strong 2017 with high newbuilding deliveries in the first quarter of 2018 placing pressure on rates, which are traditionally weaker seasonally in part due to Chinese New Year.

Webb says rates typically step up sequentially each quarter during the year and the pattern is expected to be the same in 2018.

AXIA has raised its dry cargo rate forecasts by 20% on average for 2018.

Capesize bulkers are now forecast to earn $17,500 per day this year, ahead of the $13,000 per day average in the year to date.

Panamax and supramax forecasts have been tuned up to $13,000 and $12,000 per day respectively.

Webb expects the upward trend to continue in 2019.

“With the current orderbook-to-fleet ratio at 9.6%, still at historically low levels, we believe that the dry bulk market has clear runway into 2020,” he said.

He has introduced a capesize forecast of $23,000 per day for next year, with panamax and supramax estimates at $16,000 and $15,500 per day.

Webb has buy ratings on Golden Ocean, Scorpio Bulkers and Star Bulk, with hold tags on Eagle Bulk and Genco.

 201620172018 (AXIA Forecast)2019 (AXIA Forecast)
Capesize$7,403 per day$15,128 per day$17,500 per day$23,000 per day
Panamax$5,573 per day$9,766 per day$13,000 per day$16,000 per day
Supramax$6,262 per day$9,168 per day$12,500 per day$15,500 per day

27-02-2018 Shipowners can chill the champagne says MSI – but choose wisely when to open it, Maritime Strategies International

Maritime Strategies International (MSI), a leading independent research and consultancy firm has forecast a positive outlook for most shipping markets but the complex and nuanced trading conditions ahead could quickly derail the recovery.

In an article by Director Dr Adam Kent MSI notes that Compound Annual Growth Rate for seaborne cargo growth showed improvement almost across the board between 2013 and 2017 and will be equalled or bettered over the next four years for all sectors, except crude oil and LPG.

However the improvements come with caveats, including more complex and diverse trade routes, shifting bilateral relationships and national policies that will impact front and backhaul business.

“To illustrate the changes taking place, we used our proprietary models to rank significant bilateral trades by rate of growth in the last five years and the next five. Many of the fastest growing trades are on routes which did not see significant growth over the last five years,” explains Dr Kent. “Across all shipping sectors China remains critical to the demand side equation over the next five years but politics and policy are likely to play an increasing role.”

Thanks to lower than expected deliveries and robust scrapping, MSI predicts fleet growth levels close to or less than 2.5% over the next 2-4 years, providing good news for market balances and shipyards continue to manage underutilised capacity with deliveries outpacing new contracting.

“In terms of the earnings outlook a snapshot of the MSI forecast shows almost all vessel types at the bottom of the trough or moving up, with LNG carriers in particular leaping ahead in recent months,” adds Dr Kent. “But how owners will view prospects for 2018 depends very much on timing. An assessment of break-even levels when comparing a five year old vessel bought in 2012 or a 10 year one old bought last year show that the better result was to be patient.”

Earnings for bulkers and containerships will show marginal increases on an annual average basis this year, with sustained better rates on containers post-2018. This generally rosy outlook comes with a warning, which is that for the recovery to continue the brakes need to stay on new vessel contracting.

“The current wave of optimism evident in the shipping markets appears justified, but this outlook is not without risks. A rush to over-ordering could jeopardise the recovery within a couple of years and geopolitical factors will certainly play a part,” concludes Dr Kent. “So while many owners will have the champagne on ice, when to open it will depend on their ability to judge the market correctly and capture the best returns.”

26-02-2018 EU Monitoring, Reporting And Verifying Regulation (MRV) Regulation

Skuld would like to remind Members that as of 1 January 2018 EU Regulation 2015/757 became fully effective, this regulation is also known as the Monitoring, Reporting and Verifying Regulation (“MRV Regulation”).
The principle behind the MRV Regulation is to monitor, report and verify Co2 emissions from maritime transport and is part of wider EU initiatives to better understand and reduce greenhouse emissions from shipping.

Applicability
In short the MRV Regulation applies to all vessels, greater than 5000 GT, conducting commercial voyages into or out of, or in-between EU and EFTA (Norway and Iceland) Ports of Call. A Port of Call is a place where a vessel loads or unloads her cargo or embarks or disembarks passengers. i.e. vessels arriving, departing or sailing between ports within EU / EFTA to load / unload or embark / disembark passengers. Such a voyage will be known as a Reportable Voyage.

There are some exceptions as to vessel types, including warships, auxiliaries, fishing and fish processing (generally non-commercial voyages). It should be noted that the MRV Regulation applies irrespective of flag and it is an interesting feature that this piece of EU legislation is in a sense international in nature. This is because Reportable Voyages may well start outside of the EU. So, for example, a Hong Kong registered vessel loading containers in Singapore to discharge in Southampton would be captured under the Regulations.

What does the MRV Regulation require shipowners to do?
Essentially the aim of the MRV Regulation is to allow the EU to better understand Co2 emissions and fuel consumption in the shipping industry, or put in a broad sense, understand, the impact shipping has upon the environment. To do this, shipowners, meeting the requirements set out above must:

Monitor
Each vessel must have a monitoring plan to monitor Co2 emissions and fuel consumption as well as other relevant information to assist the EU. This other information includes, distance travelled, time spent at sea, and the type and amount of cargo carried. Measurements of fuel consumption shall be done by the use of bunker delivery notes, periodic bunker stocktaking, flow meters and measuring actual Co2 emissions.
It should be noted that monitoring is also required for vessels manoeuvring within port and when alongside.

Report
The second step is to report that which has been monitored. Please note that there are requirements to report not only on a ‘per voyage’ basis but also on an annual basis. The annual report consists of the aggregated totals of emissions and other required measurements for all voyages which fall within the scope of the regulation.

Verification
Once the data is collected and reported, it must then be verified. Such verification must only be done by third party accredited verifiers. Typically we are seeing classification societies who have been given the accreditation.
The role of the accreditor is to ensure that both the monitoring plan and emissions report are in accordance with the requirements of the MRV Regulation.
Once the reports are verified they will then be submitted to the EU THETIS MRV platform.
The EU then plans to publish the data it has collected through the monitoring and reporting by June 2019 and annually thereafter.

Compulsory
It should be noted that MRV Regulation is compulsory, although it will be down to Member states to implement within their own domestic legislation how compliance is enforced.

The IMO
Like buses, two schemes have come along more or less at the same time. The IMO has also introduced a similar scheme to that of the EU when it adopted a “Data Collection Scheme” in October 2016 to commence in 2019. Given that the vessel applicability is the same as under the EU scheme, the IMO version will additionally capture those vessels which would not fall under the EU version, i.e. those vessels / voyages that do not touch the EU /EFTA. Whilst exact details are being finalised, it looks like both schemes will be similar and we assume run alongside each other, at least for an initial period.

Comments
This regulation will have an important impact upon future initiatives to make shipping greener and better for the environment. Collecting data in this way should hopefully ensure that future ‘green’ initiatives are proportionate and appropriate, based upon proper analysis and in a transparent manner.

12-02-2018 Clarksons analysts questions ‘irrational’ dry cargo stock slump, By Andy Pierce, TradeWinds

Analysts at Clarksons Platou Securities have questioned the reversal seen in dry cargo stocks this year at a time the market is improving and asset prices are expected to climb further.
Bulker equities are down by 3% in the year to date as part of a wider 7.7% fall in shipping stocks during the early weeks of 2018.

Herman Hildan, Frode Morkedal and Jon Gandolfo say that falls in the share price of public dry cargo owners this year are challenging to explain at a time they have boosted their rate forecasts.
“Sector fundamentals and investor valuation have shown a rather irrational negative correlation,” they wrote in their latest quarterly report today.

The trio point to the one-year time charter rate for a capesize bulker being up 18% in the past few months, while the a 10-year-old cape has appreciated by around 12% to $23.5m over the same period.
“A $2.5m value uplift on a vessel with 40-70% leverage gives +20-40% equity return, a sharp contrast to average -6% for dry bulk equities since our last report,” the analysts wrote.

“Furthermore, historical correlations suggest a further 25-30% potential upside for the 10 year old value based on current one-year year charter rates.”

Shipping shares climbed in 2017 for the first time since 2013, with equities up by an average of 11%.

This year’s 7.7% fall in shipping shares is led by an 18% decline in crude tanker stocks, the analysts explain.

The analysts positive thoughts around dry bulk was backed up by improved freight rate forecasts.

Hildan, Morkedal and Gandolfo are now charting for capesize spot rates of $19,000 per day in 2018, rising to $24,000 per day in 2019 and $25,000 per day in 2020.

Previously the analysts had projected $14,500 per day for capes this year and $18,500 per day in 2019. Their forecasts for panamax and supramax bulkers were also increased.

25-01-2018 Older tonnage appealing for operators despite regulations, By Namrata Nadkarni, IHS Maritime

The high cost of complying with incoming regulations on ballast water and sulphur emissions is widely expected to send a significant percentage of the world fleet to the scrapyards, on the understanding that owners will choose to spend money on new vessels that will make them more competitive, rather than on retrofitting systems for compliance with incoming regulation on older ships.

While owners may have been granted a two-year (possibly longer) reprieve by International Maritime Organization (IMO) to install ballast water treatment systems on their ships, scrubbers are a different matter, with operators under pressure to select, order, and book in installation of such systems in the coming months if they prefer this option to using more expensive low-sulphur distillates. Additionally, as scrap prices are so favourable, many operators may choose to cash out of their existing investments in favour of new vessels that could give them a competitive edge.

However, Hew Crooks, Ridgebury Tankers CFO, warned that this will not be the case for all owners. “Although there is a move to a larger and more modern tonnage, it’s worth remembering that older tonnage is happier in a poor market,” he said, addressing the audience at the 9th Marine Money in London. “These vessels won’t have as much debt against them as a newbuilding, and so they can better deal with lower rates – and are often more competitive to operate.”

He believes there will be a number of routes that will allow operators to operate older vessels at a profit while still being compliant with emissions regulations. “The whole fleet cannot run on gas oil. If shipping needs fuel, it will be supplied … and there will be sulphur-compliant HFO [heavy fuel oil], although this may be more expensive than current bunkers,” he said.

Some operators such as Torm have already opted to install scrubbers across their fleet, while others, including Sovcomflot, have ordered LNG-fuelled vessels rather than retrofit their ships.

“We have no plans to retrofit the remaining fleet with scrubbers,” Sovcomflot CFO Nikolai Kolesnikov said during the panel discussion, adding that the company would determine the best means of compliance with regulation closer to the time of enforcement.

While this may take the form of scrapping older tonnage, he warned that many operators may not be eager to part ways with their vessels, particularly at a point where the market is in flux. “No one wants to be the first for scrapping. People would rather wait it out and see what happens.”

However, Kolesnikov admitted there could be external influence in the decision-making. “Remember that the fleet is controlled by lenders, so it’s their decision in reality,” he said.

Crooks acknowledged that in some cases, it may make business sense for operators to cash out, particularly if there is pressure from financiers or investors. “Scrap prices have doubled over the past five years and if you can sell a vessel at a historically high price that will keep the banks happy and the balance sheet in good form, the market may see more scrapping.”

According to VesselsValue, the post-Panamax fleet has most vessels where ships values have equalised against scrap prices, indicating that many of these ships are “ready” to move from the water to the yards for scrapping. But recovering oil prices and largely positive market sentiment for this year and next may lead owners to try to squeeze out as much profit from their ageing assets as possible before they are recycled.

12-12-2017 The milestones that shaped maritime safety in 2017, By Stephen Cousins, IHS Maritime

A lot can happen in a year. Cast your mind back over the past 12 months and it is hard to believe the number of significant accidents, incidents, new pieces of legislation, and other safety-related developments whose impacts are likely be felt long into the future.

In 2017 we witnessed four separate collisions between US Navy ships and merchant vessels, the most recent of which triggered a worldwide ‘operational’ pause of the US Navy fleet and a comprehensive review of the Pacific fleet.
An industry focus on crew welfare led to the publication in January of Project Martha, a three-year study into the issue of seafarer fatigue. New Maritime Labour Convention (MLC) 2006 regulations on seafarer abandonment came into force, making it mandatory for shipowners to have insurance in place to assist seafarers on board vessels if they are abandoned.

More than 100 seafarers have lost their lives over the past eight years on vessels that have capsized and sunk as a result of cargo liquefaction. The ongoing need to drive home the dangers was highlighted in October when the nickel ore-laden Supramax Emerald Star sank in the Philippine Sea. Ten of its crew remain missing.

Despite their importance, none of these events made it into our top five safety milestones of 2017, which are presented below in no particular order.

Cyber attacks
When AP Møller-Mærsk fell victim to a co-ordinated international cyber attack in June, causing the shutdown of IT systems across its business, shipping was made starkly aware of its vulnerability to hacking and the associated implications for safety.

If the world’s biggest shipping line can fall victim to such a criminal manoeuvre, despite major investment in IT development, what are the implications for smaller players that rely on connected digital systems for communication and navigation?

The so-called NotPetya ransomware that hit Maersk was hidden in a document used to file tax returns in Ukraine and was estimated in August to have cost the firm up to USD300 million, although the total cost could be much greater.
Fast-forward to October and BW Group, one of the largest shipping companies in the world, revealed that it too had been targeted by computer hackers, although it did not divulge if it resulted in financial or data loss, or if the culprits were identified.

The same month, critical cyber-security vulnerabilities affecting shipboard communication platform AmosConnect, by Stratos Global, were revealed by the cyber-security research firm IOActive. AmosConnect supports narrowband satellite communications and integrates vessel and shore-based office applications such as email, fax, telex, GSM text, and interoffice communication.

Knut Ørbeck-Nilssen, CEO of DNV GL’s maritime business, told Fairplay’s sister publication Safety at Sea (SAS), “As ships and mobile offshore units become increasingly connected and reliant on software-dependent systems, cyber security emerges as a key property needing attention to control operational and safety risks. Maintaining the integrity and resilience of critical cyber-physical systems requires a holistic approach to both safety and security and we foresee increased demand for third-party verification of cyber security during vessel construction or for vessels in operation over the next few years.”

New cargo risk
Awareness of the risks associated with liquefaction of cargoes, such as iron ore fines, coal, manganese ore fines, and nickel ore is on the increase, but incidents continue to occur, sometimes with catastrophic results.
In August, SAS broke news of an entirely new high-risk phenomenon linked to liquefaction that affects the solid bulk cargo bauxite, one of the world’s major sources of aluminium, with about 100 million tonnes transported annually by sea.

Researchers at the Global Bauxite Working Group (GBWG) observed a process whereby, when subject to sufficient dynamic loading, very wet fine-grained bauxites go through a process of slumping and dynamic separation, with the upward expulsion of water/slurry.

The findings, set out in the peer-reviewed report Research into the Behaviour of Bauxite during Shipping, state that the free surface effect of liquid sloshing about “could significantly affect the vessel’s stability, leading to the risk of the ship capsizing”.

Ai-Cheng Foo-Nielsen, assistant manager at international shipowners association BIMCO, told SAS at the time, “The GBWG has come up with a very surprising conclusion. I don’t know if this is a more serious phenomenon than liquefaction. At present there is nothing mentioned about it in the International Maritime Solid Bulk Cargoes Code. We were not aware of it. It is something very new.”

In response to the report, the International Maritime Organization’s (IMO’s) Sub-Committee on Carriage of Cargoes and Containers issued new guidance on the carriage of bauxite, requesting that extreme care and appropriate action be taken when handling and carrying the material in bulk.

El Faro report
The loss of US-flagged ro-ro vessel El Faro and its 33 crew, which sank in the Bahamas in October 2015 while trying to navigate through Hurricane Joaquin, ranks as one of the worst maritime disasters in US history.

The final investigation report into the accident, published by the US Coast Guard in September this year, placed most of the blame on its captain, Michael Davidson, who underestimated the strength of the storm, the ship’s resilience, and failed to take adequate measures to evade it, despite concerns raised by shipmates.

The vessel’s owner, Tote Maritime, also came under fire for violations related to, among other things, crew rest periods and work hours, the lack of a dedicated safety officer, and for the use of outdated ‘open air’ lifeboats instead of enclosed survival craft.

A total of 36 recommendations in the report deal specifically with safety, including many that seek amendments to the Safety of Life at Sea (SOLAS) convention, such as requiring closed-circuit TVs in unmanned spaces, an overhaul of the US Coast Guard’s Alternative Compliance Program, and the introduction of a voluntary system allowing US vessel owners to obtain certificates of compliance through class societies.

In response to the findings, a Washington DC-based maritime attorney told Fairplay, “I think you have to look back to OPA 90 [the safety regime put in place after the Exxon Valdez oil spill] to find a vessel incident that could have effects as far-reaching as this…. And who knows what Congress will do with this, in terms of new legislation. Even after the Deepwater Horizon [oil spill in the Gulf of Mexico in 2010] we didn’t see these sort of across-the-board recommended changes.”

The Polar Code
As global warming melts new shipping lanes in the ice, an increasing number of ships are expected to steer through Arctic waters in search of shorter journey times, increasing the risk of accidents and environmental pollution.
The Polar Code came into force in January and, for the first time, sets minimum international safety and pollution prevention requirements for ships operating in the Arctic and Antarctic. The code lays down mandatory standards, covering a range of design, construction, equipment, operational, training, and environmental protection matters.

The code also makes it mandatory for companies to ensure that masters, chief mates, and officers in charge of a navigational watch on ships in Arctic waters have completed appropriate training, taking into account the provisions of the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW). It bans shippers from dumping oil, oily waste or noxious materials into polar waters, but falls short of what some environmentalists wanted.

Chief among the omissions is the fact it does not address ships’ use of heavy fuel oil (HFO), which can be severely toxic to flora, fauna, and indigenous communities because of the length of time it takes for sludge to break down in cold water. However, that could change in future. In July, the IMO approved an environmental review of the use of HFO in the Arctic – it is already banned in Antarctica – to begin in April 2018.

Autonomous vessels
This was the year the concept of autonomous ships became a viable reality as industry and regulators made bold steps to usher in the technology.

Human error is the cause of the majority of accidents at sea, so the development of partially or fully automated vessels, operated or piloted using sensors, smart digital systems, and other technologies, has the potential to make the shipping industry much safer.

In May Yara and Kongsberg announced a partnership to build on what they claim will be the world’s first autonomous and zero-emissions ship. The container vessel Yara Birkeland is due to start operation in the latter half of 2018.
In October Rolls-Royce signed an agreement to start using Google’s cloud-based software to “teach” object detection to systems for oceangoing autonomous ships.

Recognising the future ramifications of autonomous shipping, IMO’s Maritime Safety Committee agreed to start to map out a new international legal framework for the safe operation of autonomous ships.

Critics have pointed to the potential human cost of the technology, warning that, if not kept in check, autonomy could spell the end of traditional seafarer roles: engineers may be moved off-ship and operators relocated to shore-based positions.

Adrian Mundin, policy manager at the UK Chamber of Shipping, told SAS, “Most accidents are down to human error, but what we never measure is how many accidents are avoided because of human intervention. Take humans off ships and you are entering an unknown realm. Stakeholders in shipping need to keep abreast of these developments to ensure the most beneficial application of the technology.”

29-11-2017 Fleet overview: The year of recovery, finally? By Max Tingyao Lin, Lloyd’s List

IF THE old saying that shipping is the bloodline of global trade holds true in 2018, owners will finally welcome the long-awaited year of recovery — albeit cautiously.

There are catalysts for a market upturn in nearly all merchant shipping sectors, yet at the same time the fragile recovery could be easily derailed by continued fleet growth and macroeconomic risks.

For now, the most cited reason for optimism, namely improving global economic prospects, is still there, supporting underlying confidence among owners.

The latest forecast of the International Monetary Fund puts the world’s economic growth rate next year at 3.7% in 2018, compared with 3.6% in 2017 and 3.2% in 2016. Global growth of real gross domestic product is projected to accelerate to 2.9% next year from 2.7% this year, according to the World Bank.

The Organisation for Economic Co-operation and Development also expects global growth to go on an upward trajectory in 2016-2018.

The momentum is widespread among advanced and emerging economies, except for Brexit-plagued Britain, the forecasters said, painting a rosy outlook for general maritime trades because a broad recovery tends to favour shipments between regions.

But there are also risks. The World Trade Organisation said the growth of global merchandise volume should fall to 3.2% in 2018 from 3.6% this year, although added that the expansion could be as much as 4.4% or as little as 1.4%. Higher base, tighter monetary policy in developed countries and Beijing’s efforts at reining in fiscal expansion and easy credit are behind the deceleration, the WTO said.

In terms of seaborne trade, Clarksons has predicted an annual growth of 3.5% next year, lower than the 2017 level of 4.1%, but higher than the 10-year compound annual growth rate of 3.1%.
The dry bulk shipping markets are about to enjoy their best trading periods since 2013-2014 — but it remains to be seen whether owners can really make net profits.

The easing oversupply has given owners hope, because some analysts predict net fleet growth of less than 1% in 2018 if scrapping picks up ahead of new International Maritime Organization rules taking effect.

However, some other estimates are more conservative. The trading fleet’s capacity expansion rate could still be as high as 4.2%, compared with 3.3% this year, according to LLI, driven by deliveries in the segment of 200,000 dwt vessels or larger.

There are also mixed signals on the demand side, with iron ore and coal imports to China, the world’s largest dry bulk trading nation, supported by healthy economic growth but potentially curbed by environmental policies.

Jefferies has predicted global dry bulk trade growth of 2%-3% in 2018, similar to this year’s level.

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