2018 Outlook – Svend Andersen
By Svend Andersen
Chief Financial Officer, BBC Chartering
The market for project logistics and subsequent demand for global shipping solutions continue to develop at a steady pace – good news indeed. Demand for BBC’s services is being driven by new undertakings and increasing volumes for upgrading, expansion, and replacement investments around the world.
Towards the end of 2017, we reported sound general activity in the market and expected promising opportunities in 2018. An ongoing, strong trend for wind power developments, solid demand for steel products, higher mining activity, and a perceptible upswing in oil and gas related activity will certainly help to keep cargo volumes moving and our ships busy in the coming year.
In addition, mega projects such as China’s One Belt One Road initiative and Saudi Arabia’s new desert city project, Neom, inspire visions that may translate into interesting business, creating a positive impact to demand for project shipping solutions in the near future.
Towards the end of December, the oil price was trading above the US$60 per barrel mark again; a level that was last seen in July 2015. We at BBC Chartering are curious to see what extent this will drive demand in the sector, keeping in mind that oil once traded above US$100 per barrel in 2014. We’re observing trading activity of pipes picking up again and, with the increased number of rigs coming online, we dare to look optimistically into 2018.
Of course, there is risk and we may see some projects slipping; however, we hear positive sentiments from customers. Interesting projects are lining up and good feedback is coming from the Middle and Far East, Southeast Asia, South America, Africa and Europe. Over the last few months of 2017, these regions gained momentum that we believe will be sustained through 2018 and, hopefully, beyond.
For the charter market, promising signs are seen for handysize bulk carriers, container ships, and even the container feeder segment. We’re optimistic that the increased fixture activity in these segments indicates a likely possibility for recovery of freight rate levels in the project shipping sector.
Photo credit: BBC Chartering
WANT MORE LIKE THIS?
Subscribe to Breakbulk Magazine. Published six times a year, the magazine includes insight and analysis on the biggest issues facing the project cargo and breakbulk industry, profiles and commentary from leading shippers, event previews and lots more. Digital is free - just sign up! The print subscription is $48 a year, which includes shipping worldwide. You might also like our weekly Newswire - try it out, it's always free.