The shipping markets have taken owners on a wild ride in 2021. Containership rates have been soaring for a while now, and while they appear to have peaked in early October there are no clear signs of any significant correction yet. Dry bulk rates surged higher in September and early October, reaching a 13-year high, but rates have fallen sharply since then, especially for Capes. Rates for LNG carriers have also seen dramatic gains, with period charter rates for these ships jumping in 21Q3, and spot rates skyrocketing at the start of 21Q4. In contrast, the tanker market party took place back in 2020, and this year can be characterized as one long hangover, after the frenzy in 20Q2. VLGC rates have also been down compared to last year, though only modestly.
Looking ahead, we expect more big movements in the shipping markets over our forecast horizon, with a reversal of fortunes likely in all sectors. In particular, our Base Case scenario sees containership and dry bulk rates adjusting lower over the next two years, while tanker rates are expected to rebound, albeit modestly at first. Gas carrier markets are also expected to reverse course, with LNGC rates expected to fall back, while VLGC rates should improve in the near-term.
While our Base Case scenario sees a continued recovery in the global economy over the coming year, the spread of the Omicron variant poses a significant risk. Our Low Case scenario assumes that a combination of new Covid outbreaks, supply-chain disruptions, and rising inflation end up de-railing the recovery, leading to slower trade growth.
We will continue to monitor developments closely and update our clients as required. We look forward to discussing the market outlook and investment, chartering, and financing implications in 2022.
Marsoft wishes everyone a healthy and prosperous 2022!
