THE MARKET SENTIMENT INDEX (MSI)

for the MPP Industry – Edition #13

LONGER VOYAGE DURATIONS LIFT SENTIMENT

The 13th Edition of the MSI for the MPP sector is reporting another rise in overall sentiment – the 3rd time in 5 polls – to a new level of 53.6. Tonnage tightening stemming from the combined impact of the war in Gaza prompting carriers to take the longer Cape of Good Hope voyage from East to West and vice versa, and the still limited access through the Panama Canal is continuing to impact the sector. Whilst it has been reported that the rain has started falling in Panama moderating auction rates and easing waiting times, further scheduled lock gate maintenance culminating mid year may continue to crimp the free flow of traffic in the medium term. With the spillover of the war in Gaza already a threat to shipping in the Gulf of Aden the recent escalation involving Iran adds increasing uncertainty as to when the area will be deemed safe enough for regular GoA / Suez passages to resume.
Whilst these events are a challenge to shippers and cargo interests, carriers are benefitting. The gloom from the unexpectedly soft 2nd half of 2023 has dissipated and 75% of carriers responding to this poll are reporting higher freight rates, increasing cargo volumes and longer forward order books than the previously reported period.
In particular optimism towards projects is improving. The wind sector has underperformed in recent times as project costs have been undergoing a reset owing to high inflation, cost of capital and consumer pricing but that is expected to conclude this year with postponed projects likely to clash with new projects accelerating new demand. The Global Wind Energy Council (GWEC) reported this week that the industry must install at least 320 GW a year by 2030 to meet emissions reductions targets agreed at COP 28. ‘It took us over 40 years to reach the 1 TW mark of worldwide installed wind power’, said GWEC’s Chief Executive Ben Blackwell. ‘We now have seven years to install the next 2 TW’.
As the northern summer season approaches carriers would normally expect a slowdown in activity but with the MSI Future Index (a measure of confidence in the next 6 months) ticking higher to a level not seen since the beginning of 2023 there is a sense among carriers that the mixture of supply constraints and supportive demand will continue.
For a fuller MSI Report please go to www.oneworld-shipbrokers.com/msi and hit the subscribe button. The MSI Report will then be delivered to your inbox four times a year.
Edition #14 of the MSI will be published in July 2024. One World Shipbrokers ©

The Market Sentiment Index is a leading indicator index of activity in the MPP industry. It averages the responses from an anonymous group of multipurpose vessel owner and operators to a set of breakbulk shipping-related questions. A reading of 50 is neutral, indicating a static market; scores below 50 show pessimism or wariness, and a score above 50 indicates optimism