While orders for bulkers and tankers are expected to increase, declining demand for container and LNG/LPG vessels and their increased deliveries is likely to shrink the overall orderbook.
This is the scenario that emerges from Veson Nautical’s latest shipping market outlook through 2027, which presents a mixed forecast across different vessel types.
According to the firm, geopolitical tensions in the Bab al-Mandeb Strait are creating both risks and opportunities for shipping, with vessel rerouting benefiting some segments but adding uncertainty. While a resolution could lower demand, prolonged disruptions might offer further opportunities.
Broader economic uncertainty, driven by sanctions, trade wars, and high interest rates, along with China’s fragile recovery, further complicates the outlook.
The container sector is facing a short-term demand boost, with 2024 set to see growth of 14.9 per cent, driven by rerouting around Africa. However, the longer-term outlook is more challenging, explained Veson Nautical.
With net fleet growth expected to rise by 7.8 per cent annually between 2024 and 2027, the supply of vessels may soon outpace demand, putting pressure on freight rates.
Although container freight rates are currently elevated due to longer sailing routes and congestion at ports, this may not last. Veson Nautical predicts that once the Red Sea conflict stabilises, rates could face a correction.
LPG production in the US is expected to grow by 4.4 per cent in 2024, down from 13.4 per cent in 2023.
Veson Nautical noted that exports remain strong, but growth will slow, partly due to an active hurricane season.
The VLAC orderbook has reached 51 vessels, with deliveries set for 2026-2027, initially focusing on LPG trade until ammonia projects mature.
By 2025, Panama Canal operations are expected to normalise, reducing sailing distances. However, droughts could still cause disruptions, explained the firm. Asian demand for LPG is forecast to grow, particularly in China, though muted operating rates may limit the full utilisation of new capacity.
The bulker market is set to remain strong, underpinned by a low orderbook and limited supply growth. Moderate demand increases are anticipated as green energy investments accelerate and changing trade patterns boost tonne-miles.
However, the ongoing conflict in the Red Sea has reduced bulker transits through the Suez Canal by 37 per cent this year.
Last month, Veson Nautical introduced IMOS X, bringing improvements to claims workflows , voyage emissions data capture and reporting, and counterparty connectivity.