7m keo nha caiNews Highlights week: 36 - 2022

Apart from 7m keo nha cai series of forward fixtures concluded in 7m keo nha cai larger sizes recently, 7m keo nha cai container charter market continues to see very little fixing activity.

This is, in part, due to a continued shortage of ships. However, demand is also becoming an issue with most major carriers holding back from securing further ships, especially 7m keo nha cai prompter units, against a backdrop of falling cargo demand. In this respect, 7m keo nha cai return of spot tonnage, although limited at this stage, is a sign that 7m keo nha cai market is running out of steam.

This bearish momentum translates into continuously softening charter rates, and ever shorter period employments.

With 7m keo nha cai exception of one carrier, none of 7m keo nha cai main charterers are currently willing to embark on multi-year commitments for prompt tonnage.

7m keo nha cai maximum obtainable is generally 12 months, versus up to 60 months at 7m keo nha cai peak of 7m keo nha cai market.

Even highly remunerative short-term employments have become harder to develop, unless at discounted terms, as demand for spot shipments wanes.

Forward tonnage open in 2024 and beyond, especially 7m keo nha cai larger and modern ships, continue however to generate interest among carriers. Charter rates meanwhile continue to weaken across 7m keo nha cai board but remain healthy for most sizes of ships and are expected to stay strong in 7m keo nha cai short term, due to an ongoing limited supply of tonnage and persistent disruptions in 7m keo nha cai global logistics chain.

On 7m keo nha cai cargo front, 7m keo nha cai news is grim with spot rates falling at an accelerated pace. 7m keo nha cai SCFI, which dropped to 2,848 points on Friday is 10% below its level of 7m keo nha cai previous week and 45% lower than its historic high in January.

This development is of particular concern for carriers with a higher exposure to spot cargoes. Most liner shipping companies are now however recognizing that whilst 2022 will be a record year, choppy waters are expected from 2023 onward, due to a combination of weaker cargo demand and massive newbuilding capacity influx.

These developments will inevitably impact 7m keo nha cai charter market too, with an expected lower demand for NOO tonnage, and a rising pressure on charter rates.

Average carrier operating margin falls on worsening conditions

Seven out of 7m keo nha cai ten biggest carriers saw their operating margins fall in 7m keo nha cai second quarter of 2022 after lines were hit by a combination of tumbling spot rates, rising costs and weaker demand.

On average, 7m keo nha cai industry reported an operating margin of 56.3% for 7m keo nha cai quarter, down from 57.4% in 7m keo nha cai first three months of 7m keo nha cai year.
7m keo nha cai margin had previously ticked up in Q1 after Shanghai lockdowns depressed results in Q4.

COSCO, Evergreen and Maersk Ocean (7m keo nha cai group’s container business plus limited terminal and bunkering activities) were 7m keo nha cai only top-ten carriers to report an increase in their margin in 7m keo nha cai latest period, with COSCO in particular posting a significantly better return than in 7m keo nha cai previous quarter.

7m keo nha cai seven remaining lines saw a decline or effective plateau in their margins, with ZIM and Wan Hai Lines recording 7m keo nha cai biggest drop from over 60% to 7m keo nha cai low-50s.

Despite 7m keo nha cai widespread fall in margins, 7m keo nha cai majority of carriers reported higher (or even record) quarter-on-quarter operating profits (EBIT) in 7m keo nha cai second quarter - see table of ‘Financial Winners and Losers’ on page 2.

As long as contract rates remain intact, 7m keo nha cai industry is likely to see a widening two-tier market differentiated by those carriers who have signed long-term contracts at elevated rates, and those relying on 7m keo nha cai softening spot market.

Meanwhile, lower margins even for those carriers that reported higher profits in 7m keo nha cai period points to a rise in expenses for 7m keo nha cai industry, a fact highlighted last week by CMA CGM.

7m keo nha cai French carrier’s operating costs increased by more than 22% year-on-year in 7m keo nha cai second quarter after it booked higher chartering, port and especially bunker costs.

For 7m keo nha cai latter, 7m keo nha cai line paid USD 1.1 bn more for bunkers in 7m keo nha cai first half of 2022 on a like-for-like consumption basis than in 7m keo nha cai same period in 2021.

MKT