Third-quarter results for 2016 have done little to lift the mood across shipping sectors, perhaps there are better things to come next year?
The sun is setting on the tanker market, container lines are resting uncomfortably in beds of their own making, and the survivors of the dry bulk market are slowly and cautiously climbing back from the darkest depths.
Those are the apparent themes as the third-quarter results season draws to a close.
While the absolute dearth of newbuilding orders has come to an end, the slight trickle of business into shipyards was evidently not enough over recent months. Shipyards are looking to restructure where possible, to diversify, and to downsize their workforces.
For tankers, the market is cooling and owners are fixing vessels in expectation of worse times to come. Falling earnings hacked away at the big profits enjoyed by many a year ago, tipping some back into the red and leaving others around the break-even line. There is some good news on the horizon in the form of a regulatory boost to scrapping, but the consensus is that next year will be a volatile one.
Fierce competition in the container sector brought plenty of unsatisfactory results for the quarter, but all eyes are now on next year, where big changes are set to come. Consolidation is the name of the game, both through firm line tie-ups, such as that announced in Japan, and the new alliances coming into effect in the second quarter.
Fortunes are better in the dry bulk sector, but only relative to an unprecedented position of despair at the start of the year. Donald Trump’s victory in the US presidential race may have spurred a recent rally in US dry bulk stocks, but repairing the market fundamentals has been a slow slog. Kahlid Hashim warned in Precious Shipping’s results that a recent slowdown in scrapping could bring about another sharp dip in early 2017.
As the last weeks of 2016 complete a year that few in shipping will remember as a great one, Lloyd’s List is looking ahead at what 2017 has in store.
By Gary Howard, Lloyds List.
Read more from Gary and his colleagues at: www.lloydslist.com