In the cyclic world of shipping, one segment in particular is heading towards a strong 2023. Another segment has to wait a bit for the upswing to arrive, while a third is set for a decline. Analysts share their prognoses for the upcoming year.
One shipping segment is very likely to have a prosperous 2023 at a time otherwise marked by great uncertainty.
According to several analysts, tanker operators are in the best position, especially carriers sailing with refined oil such as diesel, gasoline and other fuels.
”We are very positive about refined oil products in regards to next year,” says Jon Nikolai Skåland, shipping analyst at Norwegian bank SEB.
We expect a fine income across all tanker carriers
Jørgen Lian, senior analyst, DNB Markets
The optimism is primarily anchored in Europe shutting down all seaborne imports of Russian oil from February.
”The EU embargo will come in early February, meaning that a big part of the expected alterations in trade patterns are still ahead of us. We expect that to contribute to increased tonne-mile and effect going forward,” he says.
Analyst firm Kepler Cheuvreux also highlights that ships will have to sail at longer distances when European countries are forced to bring in their oil from other places than Russia.
”We are positive about outlooks for the tanker market next year with supply growth being limited, and we expect demand to gradually increase again,” states shipping analyst Anders Redigh Karlsen.
This projection is supported by bank DNB Markets, arguing that the combination of an import ban on both crude and oil products, longer voyages and a low order book will make the upswing continue. There are also obstacles, though.
”The biggest challenges in 2023 will be the recession ghost and the risk of declining volumes from Russia. Other than that, it looks good, and we expect a fine income across all tanker carriers,” says senior analyst Jørgen Lian to WPO.
Promising outlook for dry bulk
While the upswing has already started for tanker operators, the heydays of the pandemic were replaced by harder times for dry cargo companies in 2022.
The big unknown at the moment is China. The country has eased its zero-tolerance policy in regards to Covid which basically is a good thing for dry bulk carriers, which have more to do when the Chinese economy is doing well.
The reopening of China has, however, led to an explosion in the infection rate, with the world waiting in excitement on how the Chinese rule will react.
If China returns, it will be an interesting market, I think, as the fleet growth is limited
Anders Redigh Karlsen, analyst, Kepler Cheuvreux
Kepler Cheuvreux stresses that much depend on China for dry cargo operators.
”If China returns, it will be an interesting market, I think, as the fleet growth is limited,” states Redigh Karlsen.
DNB Markets is also positive about dry bulk, pointing to several underlying good news.
”On the long term, fleet growth is relatively limited, and this should provide a lasting upswing for the sector,” says Lian.
He argues that it will be reflected in the share prices of publicly listed dry cargo carriers.
”In this segment, the shares in carriers are set a favorable price and do not, in our opinion, reflect the potential for upcoming years and the long-term picture. It’s a sector where you can pick cheap shares with a limited downside and a big upside potential,” states Lian.
