Demand and Supply balance
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Conclusion ● Fertilisers are predominately shipped in Handy to Supramax vessels. ● General trade is forecast to grow at an average of 5.5% 5 5% per annum over the next 4 years with ton/mile growth higher.
● BUT huge fleet growth will put severe downward pressure on freight rates ● Inefficiencies in fleet utilisation (caused by port congestion and increased ● ● ●
ballasting) will assist keeping freight rates from collapse and therefore freight volatility will continue The medium term demand-supply balance tips heavily towards the supply The larger ships to be the main sufferers. Handy size to be far more resilient because less ess o overbuilt e bu t a and da an o older de fleet eet which c ca can be retired et ed more o e eas easily y In addition fertiliser charterers operating in Red Sea/AG/WC India will incur war risk insurance and very resilient freight rates due to piracy and changing patterns of trade thus may not fully benefit from the general weaker freight market
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