Gearbulk Integrated Report 2023 - Report - Page 40
GEARBULK
OUR OPERATING CONTEXT
INDUSTRY TRENDS
IMPACTING OUR BUSINESS
Market trends, in昀氀uenced by global trade dynamics and various factors
including consumer behaviour, economics, technology, and environmental
regulations, impact our strategies.
Dry Bulk
Containers
The bulk carrier market in 2024 has shown a strong start,
The container market has a potential e昀昀ect on Gearbulk activi-
with average Supramax earnings being around $13,000/
ties as its supply and demand imbalances can indirectly impact
day in Q1 compared to $10,000/day a year ago. This surge
the segments we operate in.
is attributed to robust demand trends, and vessel re-routing
away from the Red Sea. The global dry bulk market appears
Ahead of the Chinese New Year holiday, transportation demand
to be strong. Transatlantic rates are holding steady due to
in Europe and the Mediterranean dipped, encouraging carriers
scarce tonnage availability, leading to stable market levels.
to slightly reduce freight rates in anticipation of post-holiday
Ship owners are reluctant to reposition tonnage to EU and
voyages. Before the Lunar New Year commence, companies
MED, resulting in additional premiums for transatlantic ship-
worldwide rush to get their goods out of China before facto-
ments. In the transpaci昀椀c market, rates are driven up by
ries close, because, during the Chinese New Year celebration,
increased exports of steel, coal and timber, among others.
many factories shut down completely signi昀椀cantly reducing the
There appears to be no resolution in the Red Sea. Houthi
number of containers being 昀椀lled and shipped.
rebels continue targeting ships and have threatened to
attack ships moving towards Africa’s Cape of Good Hope
In March, the container shipping market experienced a stabi-
as well, potentially disrupting east-west tra昀케c.
lisation of freight rates after an initial increase in January and
February due to the redirection of vessels away from the Red
Looking ahead to the rest of 2024 and into 2025, the outlook
Sea. Long-term rates have increased due to higher surcharges
for bulk carrier markets is positive. Tonne-mile demand
rather than changes to the base rate, re昀氀ecting a cautious
is expected to grow by around 3% in 2024, absorbing the
approach from shippers in locking in contracts due to expec-
supply growth of about 3%. Factors contributing to this
tations of falling rates.
growth include steady cargo volumes across major commodities and minor bulk commodities, and impacts from Panama
The con昀氀ict in the Red Sea has signi昀椀cantly impacted sailing
Canal transit restrictions. If the ongoing disruption in the Red
distances and the number of containers being moved by sea,
Sea is prolonged, the tonne-mile demand could increase by
leading to shifts in volume and trade routes. While deep-sea
an additional 0.6%.
trades have experienced higher growth in demand, intra-regional trades have seen comparatively lower growth rates.
In 2025, while the supply-demand balance may soften
Currently, the re-routing of vessels is the dominant demand
slightly, the market is still expected to remain stable. Dry
driver at the moment, as Suez Canal transits for containerships
bulk trade is forecasted to grow by 1.4% in tonne-miles,
are down ~87% in March compared to December.
assuming the Red Sea disruption eases, while 昀氀eet growth
is expected to be 2.3%.
The container 昀氀eet has been able to meet the increased
TEU-mile demand, partly due to record-high deliveries of
Overall, the outlook for the dry bulk market in 2024 and
new ships. However, this in昀氀ux of new capacity, particularly
2025 remains positive, with expectations of 昀椀rmer markets
in the 13,000 to 17,000 TEU range, is contributing to over-
compared to 2023. The Supramax FFA market currently
capacity concerns in the longer term. These concerns orig-
displays a rate of $14.000 for the rest of 2024 before
inate from the challenge of managing the supply-demand
declining to around $13.000 in 2025.
imbalances as more capacity enters the market. In total, a
further 1.9 million TEU is expected to enter the market in 2024.
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PART 2 – OUR BUSINESS IN CONTEXT
