Drewry Maritime Financial Insight – January 2021

Drewry Maritime Financial Insight – January 2021

Container shipping. 2020 was a year of ups and downs for the liner operators. Earlier this year, carriers struggled with the COVID-19. But in the second half of the year they reached stability. “By the end of the year, the idle capacity as a percent of the total fleet was down to 3.2%,” Drewry said. Hence, we saw a significant decrease of 9.8% in June.

The main point is that more profitable to curb capacity that add capacity. It has been norm over the last 15-20 years. In addition, everyone was worried about the market collapse falling due to the pandemic. But the year ended with a significant increase in ordering activity.

Port and terminal operators. This sector recorded an increase for the third consecutive quarter, (4Q20: 18%, 3Q20: 4%, 2Q20 14% and 1Q20: -38%).  But the average port yield was not able to compensate for the damage caused during the 1Q20 meltdown. In this regard, from the second quarter of 2020, bankers and governments tried to gain the trust of investors. They reached the goal and its positive effects were clearly visible in the next quarter.

Dry bulk shipping. This section had a good comeback after COVID-19. After the implementation of the economic stimulus package, this improvement was further strengthened. In addition, the cold weather has boosted energy demand in the Far East and Europe. Hence, we expect the coming months to be of consolidation for shipping rates and stock prices.

Crude tanker shipping. The positive news of vaccine distribution boosted the three main indicators. However, stocks of crude tanker shipping companies in our portfolio declined 4.1% over the same period. Weak oil demand, coupled with rising restrictions in several European countries, also led to a sharp drop in TCE rates.

Product tanker shipping. DMFR product tanker index moved up 5.9% in 4Q20 as spot rates strengthened on the key trading routes amid seasonal demand. However, the index fell by 53.5% in 2020. Because the fall in the TCE rates across vessel class significantly destroyed the market capitalization of product tanker companies. Vaccine supply, meanwhile, has raised hopes of recovery in all sectors. But the product tanker market is expected to remain under pressure in 1H21.

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