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Shipping Weathers the “Storm” That is 2022

The shipping industry appears to be weathering the current “storm” of events, from the war in Ukraine, to the latest supply chain disruption in China. In its latest weekly report, shipbroker Intermodal commented that “just when we thought that the war in Ukraine will out stage Covid-19 pandemic, the Shanghai lockdown is making sure that this will not happen. Dry bulk and containers are still playing catch up after the 2020 and 2021 lockdowns, but we are starting to witness some effects of the current rather strict lockdown. Dry bulk ships are piling up adding to the already existing congestion with the handies and supras being the sizes that enjoy the largest improvements”.

The shipbroker added that “on the container side, the ships up to 1,000 TEU might see some decrease in the period may be down to 12 months or less, and some decline in the rates that will only be countered by the catch-up period that follows every lockdown. The limited supply of ships will keep the rates at a good level. Unless we see prolonged lockdowns around the world, we don’t expect the rates to be affected”.

Source: Intermodal

According to Intermodal’s SnP Broker, Mr. Timos Papadimitriou, “on the other hand, high oil prices and inflation will keep affecting Europe. The Chinese lockdown could somehow keep the oil rally at a relative check. Time will tell. It seems that offshore exploration will slowly gain ground. If that happens shipyards will start to receive orders for new ships to cover the demand which could potentially limit the slots for dry and tankers even more. Currently, containers and LNG ships have taken the lion’s share when it comes to orders, leaving the other segments behind. This could be good news for older ships. Although with new regulations in effect after 2023 some newbuildings especially tankers will have to be inked, slots will not come around easily unless the capacity drastically increases”.

Papadimitriou added that “as far as the prices are concerned, prices on the crude and product carriers have been steadily increasing even prior to the Ukrainian conflict. From an SnP view, there are not a lot of ships currently in the market with most of them being older than 10 years old and some older than 15 years. Dry bulk SnP activity remains strong over the last 2 months with 48 dry transactions in February and 81 in March (for ships larger than 26k dwt). On the wet side, 18 tankers switched hands in February and 35 in March (for ships larger than 30k dwt and build after 2004)”.

“Currently, the shipping industry must navigate through geopolitical developments and the aftermath of a pandemic that somehow refuses to go away. So far it seems that the industry is doing well and for the first time in many years. Dry, Wet and Containers are making money at the same time. We are not even yet halfway to 2022. Let us see what the future holds”, Intermodal’s broker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

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