Boom in Container Shipping: VesselsValue

The Containership market has been showing some significant gains across both earnings and values, particularly in the Post Panamax and New Panamax segments, says VesselsValue.

The US China trade war has had a negative impact on vessel demand. In terms of values, it’s been very much a split market, with larger container vessels significantly outperforming the smaller types.

The best demand and supply fundamentals in the Containership market are found at Post Panamax and above sizes.

The Panamax sector is somewhat of a mixed bag. Historically, demand and supply fundamentals have been poor, with demand falling at faster rates than the shrinking supply of this vessel type.

The data for the smaller types is generally less positive, with supply growth generally exceeding demand, slightly falling values and less theoretical upside that the Panamax sector based on the position in cycle and macro-economic forecasts.

Demand growth in terms of total TEU capacity of the large Container fleet being utilized has been strong. Over the past three months demand has grown by 2.3% versus a growth in vessel supply by total TEU capacity of 1.7%. This has certainly been one of the drivers for the significant rise in charter rates over that period.

However, on an annual basis, supply growth at 4.9% has outpaced demand growth at 3.3%. Over a five year period, demand and supply have been pretty well balanced with demand growing at 33.5% and supply at 33.1%.

Over the past 3 months, demand for Panamax Containerships has grown at a healthy 2.1% while supply has shrunk slightly by 0.1%. However, over a longer history, the reverse is true with demand shrinkage generally outpacing supply reduction.

Over the last year, Panamax TEU demand has falling by 5.6% while TEU supply has only fallen 1.3%. Over the past 5 years demand fallen 36.6% with supply falling significantly less at 22.1%.

Over the past 3 months, demand has been flat, with supply growing at 3%, over the past 5 years, demand has fallen by 1.5% while supply has grown very moderately at 0.2%. Over the last 5 years, demand has fallen by 3.8% and supply has grown by 0.6%.