As long as lockdown measures are in place in many parts of the world, global demand recovery will take a long time. In turn, it hinders the improvement of the freight rate market. Allied said that “we are slowly coming to the end of what has been one of the toughest, most volatile and unpredictable years noted in over a decade for the global market economy.”
They are now focused on how to manage the damage in 2021 and be able to slowly recover. Also, over the past few weeks we have seen optimism in the sea freight markets. According to Allied, we still have countless obstacles to overcome. This week we saw more pressure on trade relations between China and the US. What makes the situation worse is that these events took place amid the worsening of the pandemic. New cases are still on the rise in the United States and Europe. Despite these factors, everything is very different from spring and even a month ago.
In this regard, the Head of Research & Valuations with Allied is optimistic about strengthening the improvement of future global markets. They saw an increase in activities in the dry bulk sector last month. They also see evidence of upward pressure mounting for modern tonnage in certain size segments of this sector. It seems that despite the overall performance, confidence is entering this market again.
But they can not apply this positive tone in all sectors of sea freight. The prevailing atmosphere in the tanker market is very different from dry bulk. Lazaridis added that “freight rates have been severely hit since the summer months. Also it has no signs of recovery since then.”
But freight rates remained low for a long time, and demand for oil products fell. To improve the tanker market, it is likely that the current lockdown measures will be completely lifted. This allows for a gradual renewal demand such as passenger transport. But this is a long process. And most likely they will do it in 2021.
More information in the source.