JThe euphoria surrounding the outlook for the dry bulk market, amid a shortage of tonnage and demand for longer ton-miles, may soon evaporate, amid a deteriorating global economic environment and rising demand rates. higher loan. In its latest weekly report, shipbroker Allied Shipbroking noted that “the global economy has already entered a new trajectory, amidst this period of successive swings in interest rates. Looking at monetary policies” “aggressive” measures taken during the pandemic in an effort to contain, to some degree, the general socio-economic pressures that were building up, it was obvious that these would not be without cost. Many hoped that there would be enough economic growth to curb the splashes generated by the pandemic and its containment measures.However, while the situation in Ukraine began to worsen a few months ago, an unprecedented rise (at least in recent history) in the inflation rate has started to appear. This has been one of the biggest concerns lately for the health of the global economy going forward.”
According to Allied’s quantitative analyst, Mr. Thomas Chasapis, “the question for us now is how immune the shipping industry can be to these fundamental changes. We used the TRIX (triple exponential average) metric derived (and equally weighted) from the 5-year unit asset price levels for the Capesize, Panamax and Supramax size segments for the dry bulk market, and VLCC, Suezmax and Aframax size segments for the tanker market. The TRIX shows the rate of change of a 15-period moving average that has been exponentially smoothed 3 times. The purpose of this trend analysis is not to highlight a bullish or bearish trend, but rather to highlight the recent alignment of trends between the various maritime asset markets, despite the current situation of their respective freight revenues. . The cost of borrowing is already changing, with unknown outcomes in terms of economic growth, investment appetite, capital flows and risk parity. Amidst these systematic risks in the global macros, despite what the chart below shows, the likelihood of a negative midline crossover, even in the short term, has increased significantly.”
Mr. Chasapis added that “the market view above does not necessarily support the idea of a bearish position. In the dry bulk business, things can be supported on an upward (albeit marginal) trajectory, given given the restructuring of the market that has taken place over the past two years, new rules in terms of momentum and floor-ceiling market levels are already in place. , given its protracted and uninspiring cargo market profile, things may change more abruptly and sooner than most would expect. evolution of idiosyncratic risks that could emerge within the maritime sub-markets due to the current rapid increases in interest rates,” concluded the Allied analyst.
Nikos Roussanoglou, Hellenic Shipping News Worldwide