One World Shipbrokers’ Q2 2024 Market Sentiment Index (MSI) for the multipurpose shipping sector showed another overall improvement, hitting 53.6.
This is the third rise in sentiment in the last five polls, up on the 52.4 figure from Q1 2024.
“Tonnage tightening stemming from the combined impact of the war in Gaza prompting carriers to take the longer Cape of Good Hope voyage from East to West and vice versa, and the still limited access through the Panama Canal is continuing to impact the sector,” One World Shipbrokers explained.
“Whilst it has been reported that the rain has started falling in Panama moderating auction rates and easing waiting times, further scheduled lock gate maintenance culminating mid-year may continue to crimp the free flow of traffic in the medium term. With the spillover of the war in Gaza already a threat to shipping in the Gulf of Aden the recent escalation involving Iran adds increasing uncertainty as to when the area will be deemed safe enough for regular Gulf of Aden / Suez passages to resume.
“Whilst these events are a challenge to shippers and cargo interests, carriers are benefitting. The gloom from the unexpectedly soft second half of 2023 has dissipated and 75 percent of carriers responding to this poll are reporting higher freight rates, increasing cargo volumes and longer forward order books than the previously reported period.”
Optimism regarding project is also improving, according to the MSI. The wind energy sector has underperformed recently, with project costs increasing as a result of high inflation, cost of capital and consumer pricing. However, that is expected to conclude this year with postponed projects likely to clash with new projects, accelerating demand.
As the northern summer season approaches, carriers would normally expect a slowdown in activity, but the MSI Future Index (a measure of confidence for the next six months) is ticking higher to a level not seen since the beginning of 2023. “There is a sense among carriers that the mixture of supply constraints and supportive demand will continue,” said One World Shipbrokers.
