Market analysts Poten & Partners give insight into the tanking market and the stigma of uncertainty:
"It's no secret that the past decade or so has been a difficult time for the tanking market. With excessive tonnage overages plaguing the market, there has been a stigma of uncertainty. This uncertainty was fueled in part by the sobering reality of vessel oversupply. This unfortunate state of affairs has gone on longer than anyone hoped for – but luckily, things seem to be on an upward trend in 2014. There are experts and analysts speculating that things have begun leveling-out and the trend could continue to result in a healthy market for years to come.
Market analysts, Poten & Parkers, speculate that they are looking at a market that is ready to rise again after a period of harsh lows and stagnation. The feeling is that things have hit as low as they can, so the only way to go is up. By taking a look at the order books for 2014 and beyond, Poten is seeing a trend that is curious, but ultimately something to be optimistic about. The orders for the first quarter of 2014 are showing a discrepancy in order size and what has been delivered – which signals to Poten that the differential has been delayed until a further quarter or the years to come. This speaks to upward market stability – orders being placed in advance for the years to come.
Poten further explains this trend by pointing out that the order books show that 41% of orders are VLCC, but there will be a percentage that does not get delivered on-time this year. This pushes these orders into the following year, ensuring movement in the market next year and indicating that the orders this year are more demanding than the market could handle coming off of slow years.
There is more indication that these markets will continue to rise, as the Hellas S&P Weekly Bulletin (8 Aug. 2014) points out that there is only one firm reporting dry and plenty of new contracts are in the works. One such recent contract has been confirmed that places two 64,000 Ultramaxes for 2016 and 2017. In addition, there are a number of other contracts currently in place at various firms that all have order deliveries for 2016 and 2017. This signals movement in the market for the next few years to come – which analysts are hopeful will result in a continued rise in orders and market stability.
Another sea-based market that is doing exceptionally well is the booming cruise industry – resulting in rising profits and increased job opportunities. The industry saw an increase in its contributions to the UK economy in 2014 – increasing by 6.5% from 2013's numbers. In addition, the UK cruise industry saw an increase in several other important statistics for 2014 – an increase of 4,000 jobs (+6.3 from 2013) and a 27.2% market share of all Europe-based cruises according to 2013 statistics. The chair of the CLIA UK & Ireland pointed out that the UK is the leader in the pack of a thriving cruise industry, and will see exclusive benefits such as new cruise liners in 2015."
This article was brought to you by taxback.co.uk