THE MARKET SENTIMENT INDEX (MSI)

MSI 8th EDITION – Q1 2023

For the fourth edition in a row the MSI has fallen and now stands at 53.1 which is 5.7 points or 10.7% off the peak of Q1 2022 and at a level not seen since the early summer of 2021. We are back to a point where for more than a year previously underlying breakbulk / MPP demand was increasing and confidence improving before the covid inspired, container led hurricane ripped through our sector and sent us all flying. Whilst the ‘rush’ was delirious for many, any visions of sustainability was a mirage and as the market seeks to rebalance itself all eyes are fixed forward and looking ahead with some confidence at the start of a new phase. General consensus among the carrier and operator community supports the view that the worst point is now being passed – even if the bottom hasn’t quite been found yet.
Spot vessels have noticeably increased recently in all geographical sectors as the softer Q4 2022 booking season leaves its mark and viable backhauls thin out. With among other things China exports still lagging, inflation biting, and poaching cross trades increasing, shippers have reason enough to stall their short term decisions. Nevertheless there is evidence of high paying legacy COA’s and forward bookings supporting many carriers and operators through this softer period, towards what respondents to this edition nearly all believe will be a generally rising breakbulk market later in the year driven by a series of petrochemical mega project start ups and increasing renewables / energy demand.
For a longer term view respondents to edition #8 point to an MSI of 53.5 at the end of 2023. Whilst this isn’t far from where we are now it does support the thesis that extreme volatility is giving way to calmer conditions and more transparent markets.

MSI 8th EDITION – Q1 2023

For the fourth edition in a row the MSI has fallen and now stands at 53.1 which is 5.7 points or 10.7% off the peak of Q1 2022 and at a level not seen since the early summer of 2021. We are back to a point where for more than a year previously underlying breakbulk / MPP demand was increasing and confidence improving before the covid inspired, container led hurricane ripped through our sector and sent us all flying. Whilst the ‘rush’ was delirious for many, any visions of sustainability was a mirage and as the market seeks to rebalance itself all eyes are fixed forward and looking ahead with some confidence at the start of a new phase. General consensus among the carrier and operator community supports the view that the worst point is now being passed – even if the bottom hasn’t quite been found yet.
Spot vessels have noticeably increased recently in all geographical sectors as the softer Q4 2022 booking season leaves its mark and viable backhauls thin out. With among other things China exports still lagging, inflation biting, and poaching cross trades increasing, shippers have reason enough to stall their short term decisions. Nevertheless there is evidence of high paying legacy COA’s and forward bookings supporting many carriers and operators through this softer period, towards what respondents to this edition nearly all believe will be a generally rising breakbulk market later in the year driven by a series of petrochemical mega project start ups and increasing renewables / energy demand.
For a longer term view respondents to edition #8 point to an MSI of 53.5 at the end of 2023. Whilst this isn’t far from where we are now it does support the thesis that extreme volatility is giving way to calmer conditions and more transparent markets.