December 23, 2024 | Source: Logistics Baba
According to Veson Nautical’s 2024 Year-End Report, the shipping industry has seen significant growth over the past 12 months, driven by post-pandemic prosperity and a robust newbuild market.
The Rapid Growth of the Container Sector
The ongoing Red Sea crisis has led to increased sailing distances, emerging as a key driver of demand in 2024. Supported by approximately 6% global trade growth, global TEU miles surged by about 16% year-over-year. Consequently, one-year time charter (TC) rates across all container ship sectors rose, with Panamax vessels earning $73,330/day by year-end, more than double last year’s rates, reflecting a 111% increase.
Rebecca Galanopoulos, Senior Content Analyst, stated, “The container market experienced significant growth in the past year due to increased demand, rising earnings, and a strong recovery in asset values.” Newbuild orders, including options, totaled 321, a 76% increase compared to 182 orders in 2023.
Strong Mineral Exports Bolster the Bulk Carrier Market
The bulk carrier sector performed robustly in 2024, with asset values rising across all age groups and subtypes. Notably, the value of 15-year-old Capesize vessels (180,000 DWT) increased by 26.1% year-over-year. China’s imports of iron ore, bauxite, and coal, coupled with rerouted vessels avoiding the Red Sea, were key contributors.
Despite prices remaining historically high, weaker market confidence led to a decline in bulk carrier rates during the final quarter of the year.
Tanker Bull Market Wanes Towards Year-End
The tanker market started 2024 strongly, fueled by ton-mile demand due to sanctions on Russian oil and rerouted vessels avoiding conflict in the Red Sea. However, earnings declined later in the year due to overpricing, weaker Chinese demand, and uncertainty stemming from the U.S. election and the impending Trump administration’s oil trade policies.
LNG Market Faces Challenges but Sees Rising Asset Values
The LNG shipping sector struggled with earnings throughout 2024 due to project delays, increased vessel supply, and high inventory levels. The average one-year TC rate fell to $55,000/day, a 52% drop compared to 2023.
Nonetheless, LNG vessel asset values showed steady growth, supported by increased newbuild orders and secondhand sale-and-purchase (S&P) activity. Jarl Milford, a maritime analyst at Veson Nautical, noted, “While earnings were subdued, newbuild orders in the container sector have positively influenced asset prices in other markets.”
China Top Forwarder Co., Ltd Disclaimer: This article is a reproduction from other media sources for informational purposes only and does not constitute investment advice.