After a volatile 2021, leading shipbroker Simpson Spence Young (SSY) looks at the next 12 months and highlights areas of particular interest in their 2022 Outlook Report. This comprehensive analysis looks at various drivers of shipping markets, including how developing emissions regulations may affect the state of play.
Contributions come from a range of senior research and broking experts and cover dry bulk, tanker and gas freight markets; shipping investments, CO2 emissions, FFAs, metals and energy derivatives.
SSY Chairman Mark Richardson said:
“This publication aims to provide you with a summary of the key issues that affected shipping markets in 2021 and what we are expecting to see in 2022.
“In looking at 2021 and drawing conclusions about the year ahead, Covid continues to be a constant presence. In sectors where pricing has been vulnerable to weakness it dampens growth prospects and where there is tightness of supply it adds uncertainty and stokes volatility.”
Highlights include:Â
Dry Bulk
“Seldom has a year been as eventful as 2021 for the dry bulk freight market. Vessel earnings across all main bulker sizes jumped to 13-year highs buoyed by recovering demand outside China, coal and iron ore prices spiralled to record levels, and smaller bulkers were suddenly in demand for both container and de-containerised cargoes due to supply chain dislocations creating chronic capacity shortages in the boxship market.” (P6)
Tankers
“The emergence of the Omicron variant does pose a risk to oil consumption and therefore tanker demand in early 2022 but this will depend on the severity of this strain and the scale of country-led responses to curtailing its spread…” (P13)
LNG
“From 2024 onward the LNG market will see a serious uptick in LNG production coming online. As a result, Owners in the last six months have moved aggressively with the yards in South Korea to book slots and to try and secure competitive prices. As a result, in the period of July-December, new building prices have increased over $10 million dollars for a single unit…” (P35)
Dry FFAs
“In last year’s edition of this publication, we confidently anticipated a year-on-year growth of 20% but this was far exceeded by the actual growth of over 60%, driven by a strong resurgence in Panamax, Supramax and even Handysize FFA trading…” (P29)
Shipping Emissions
“Against a backdrop of mandatory regulation, 2021 has also seen an increase in voluntary decarbonization activity by charterer and owner alike. At last count 27 shipping companies have signed the Sea Cargo Charter accord, more than treble the eight original signatories in late 2020…” (P42)
Metals Derivatives
“Power in europe has exacerbated tightness in energy intensive metals such as zinc and aluminium, causing supply cuts and pushing prices/premiums as stocks still remain low in those regions. Demand has been damaged through lack of raw materials needed in some manufacturing processes, such as those used in automotives, causing some respite from highs…” (P30)
Read the full report here.
Article shared by courtesy of Simpson Spence Young www.ssyonline.com/, the world’s largest independent shipbroker. Their 400 employees cover each major market including dry cargo chartering, tanker chartering, LNG chartering and projects, ship sale and purchase, chemical chartering, consultancy and research, futures and towage.
