Container shipping market continued to prosper and the dry bulk market recovered strongly in H1

Container shipping
 
The prosperity of the container market continues, and there is no sign of weakening recently, and the profitability of liner companies is guaranteed. However, supply chain obstruction and port congestion will continue until the first half of 2022.
 
Although it is unlikely that the Suez Canal will be blocked again, the risk of another outbreak near the main hub port still exists, especially considering the accelerated spread of Delta virus around the world.
 
Port
 
Thanks to the promotion of global vaccination and the strong growth of international trade, the port industry index continued to soar. The index increased by 9.6% in the second quarter from the previous quarter. Relevant data shows that global terminal operators earn more revenue than regional terminal operators. Although the situation is optimistic, the spread of new variants of the virus (Delta and Lambda) and earlier-than-expected interest rate hikes have brought a high degree of uncertainty to the market, both of which may have an impact on economic growth prospects.
 
Dry bulk transportation
 
Dry bulk transportation has recovered strongly in the past six months, attracting existing operators to expand their fleets and new operators entering the market. Taylor Maritime listed in London in May 2021, becoming the first shipping IPO in the market. China's demand for bulk commodities is expected to continue and will continue to promote the global dry bulk shipping market. At the same time, the prospects for coal imports in the EU and Asia are optimistic. The opening of the cereal harvest season in European countries such as Russia will increase the market's demand for Panamax and Handysize vessels.
 
LNG transportation
 
DMFR LNG shipping index has risen by 20.5% year-to-date (as of July 15, 2021), due to a 56.5% rise in Flex LNG stock price, 25.8% rise in Teekay LNG stock price, and 24% rise in Golar LNG stock price. LNG shipping stocks benefited from the recent improvement in LNG shipping prospects, with spot freight rates at the end of June more than doubled from those at the end of March.
 
LPG transportation
 
It is expected that LPG shipping prices will be further consolidated in the coming month. However, less fixed contracts and a smaller margin for price arbitrage in the US and Asian propane lead to lower demand per ton of nautical miles, and the large number of free vessels and renewed charters may put pressure on rates in the short term. On the supply side, the steady influx of new orders has raised concerns about long-term earnings. So far in 2021, 72 new ships have been ordered, compared with just 13 for the whole of 2020.
 
Crude oil transportation
 
Although the total market value of crude oil stocks fell 1.8% in June, the overall increase in the second quarter was 9.5%, outperforming major market indicators such as the S&P 500 and Dow Jones. The rapid vaccination of major economies has led to optimistic expectations for demand. The relaxation of restrictions in the United States, Europe and India, the recovery of economic activities, and the decline in inventories have all supported the upward trend of the market. However, the spread of new variants of the virus is worrying and may slow the recovery of oil consumption and delay the recovery of the crude oil market.
 
Product tanker transportation
 
DMFR Product Tanker Index rose 7.3% in the second quarter of this year, mainly due to a 19.4% increase in Scorpio Tankers' (STNG) stock price, a 1.3% increase in Hafnia's stock price, and a decline in the stock prices of other companies that make up the index. The double-digit growth in the asset price of LR2 ships supported the rise of STNG's stock price. The asset prices of Aframax vessels have also improved under the support of strong demand for crude oil and strong spot income. The transaction price of LR2 second-hand ships with a 5-year age rose by 16.7% in the second quarter of this year, and the price of a 10-year-old LR2 second-hand ships has risen by 14.9% over the same period, while the price of 5-year-old MR ships has remained stable in the past 6 months.
 
Source: Sarah Yu, XINDE MARINE NEWS

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