Is that a glimmer on the horizon?
Thursday 01 December 2016, 15:00 by Staff journalists RSS feed SHIP OPERATIONS
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For most of the past month, we at Lloyd's List have been considering what lies ahead. wavebreakmedia/Shutterstock.com
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THIS year has been pretty rotten for most shipping markets, hasn't it? Global shipping has been suffering one of the longest and deepest downturns in recent memory. We are seeing historically low freight rates as too many ships chase too few cargoes and demand is not growing at the rate shipowners thought it would.
But can shipping be saved in 2017? For most of the past month, we at Lloyd's List have been considering what lies ahead in our outlook for global shipping markets in 2017.
It's not pretty, but there are some voices prepared to make the call on the start of the next upturn. You just need to strain to hear them.
Listen to our outlooks by registering for our webinar here, and then downloading the recording.
Dry outlook
After the Baltic Dry Index touched record lows for several times this year, 2017 is set to be a better year for bulker owners.
With resilient Chinese imports of coal and iron ore, and strong grain and minor bulk trades globally, Clarksons predicted overall total seaborne dry bulk volume to grow 2% next year, the highest since 2014 if it materialises.
However, scrapping volume is likely decrease as freight rates improve, so net fleet growth will accelerate next year and oversupply worries will persist.
Crude tanker outlook
The best-performing sector in shipping last year, crude tankers have been earning much less this year and the downward trend is likely to continue in 2017.
A large number of newbuilding deliveries are scheduled to hit the water throughout most of next year. The aframax segment will be expanding at the quickest pace, followed by the very large crude carrier and suezmax fleets.
On the demand side, much will depend on the output level of the Organisation of the Petroleum Exporting Countries after the cartel said it would cut production by 1.2m barrels per day to 32.5m bpd from January.
Containers outlook
This year was perhaps the most tumultuous one in container shipping's 60-year history, and a new container shipping sector is emerging that is very different from the one that existed 12 months ago.
After years of losses due to overcapacity and low rates, 2016 saw the collapse of one major line and the announcement of five mergers or takeovers as the remaining carriers seek strength in size.
Next year will be the test to see if the new model carriers can maintain discipline on capacity to force up rates to sustainable levels, and can stave off the threats emerging from protectionism and a possible slowdown in world trade.
Fleet outlook
To date, the world orderbook stands at 5,148 vessels with bulkers and general cargo ships comprising the largest portion, followed by tankers; offshore and service vessels; passenger vessels; containerships and ro-ro; and miscellaneous vessel types, according to Lloyd's List Intelligence data.
China has largest share of the global orderbook with the bulker segment in particular.
South Korean shipbuilders will contribute mainly to the tanker segment of the global orderbook, while Japanese yards are building mainly dry bulkers and tankers.
The total dry bulk fleet stands at 794m dwt, with fleet size expected to grow 3.5% in 2017, slightly more than the 2.8% growth rate seen in 2016. This means that about 42m dwt of vessels will be delivered and 14m dwt will be removed from the fleet via scrapping, leading to a net addition of 28m dwt.
The 60,000 dwt-100,000 dwt vessel segment is expected to see the most growth in 2017 at a rate of 7.3%, compared with the 6.2% growth rate for capesizes.
The current global crude oil tanker fleet stands at 377m dwt and is forecast to grow by 6.2% in 2017, more than the 4.6% increase seen in 2016, amid an expected surge in deliveries.
Next year will see 27.6m dwt of tanker vessels delivered and 4.1m dwt removed via scrapping, leading to a net addition of 23.5m dwt to the tanker fleet.
The suezmax segment is likely to see the strongest growth in 2017 with an expected 8.2% increase. The VLCC fleet is forecast to grow by 6.3% next year.
The container fleet stands at 20m teu, or 5,270 vessels. Of that number, 237 vessels are larger than neo panamaxes, or more than 14,000 teu. The 10,000 teu-14,000 teu segment of the fleet has 119 vessels.
Looking ahead, a large container orderbook will see the global fleet grow by 6.3% in 2017, more than the 3.3% rise seen in 2016. Of the global container fleet, the neo panamax segment is forecast to grow the fastest, at a rate of 35% in 2017. Next year will see 1.5m teu of vessels delivered versus 200,000 teu removed from the market, leading to a net addition of 1.3m teu.
The total global world fleet comprises 1,966m dwt spread over 116,621 vessels. It is forecast to grow by 18% between 2016 and 2020, an annual average growth of 3.5%, which is in line with long-term seaborne trade forecasts. The total global fleet is expected to stand at 2,271m dwt, consisting of 119,436 vessels, by end-2020.