29 March 2019
- We assess the short-term supply conditions as balanced. Tonnage supply continues to show signs of contraction which is likely to provide some support to the rates. Another encouraging sign is our proprietary fleet turnaround time indicator. Its current position is implying that cargo carrying capacity is being withdrawn from the market. On the other hand, the net fleet balance has deepened concerns of oversupply with the well-documented surge of new buildings in Jan-Feb
- We assess the short-term demand conditions as balanced to bearish. While spot demand appeared firm on the back of an on-going re-stocking effort on the crude oil market, forward demand for shipping capacity continued to weaken. We continue to have concerns about the Chinese demand. One such concern is the deeply negative crude oil import spread for China which is imposing a cap on further import increase. As a result, our model is pointing towards a reduction in oil market buying interest, hence a reduction in demand for shipping.
- Our macroeconomic view has improved further. We remain deeply concerned about the short-term credit availability on the global physical commodity markets.