The Q4 2023 Shipping Market Overview & Outlook from BIMCO has been released which features an analysis of the container shipping market regarding supply and demand.
Demand
According to BIMCO’s chief shipping analyst, Niels Rasmussen, they forecast that global container volumes will grow between 0% and 1% in 2023, and between 3% and 4% in both 2024 and 2025.
Combined head-haul and regional trade volumes are expected to grow 0.5 percentage points faster than the total volumes in both 2023 and 2025 but in line with total volumes in 2024.
In 2023, third quarter volumes performed better than we previously predicted. In particular, back-haul and regional trades performed better, so we have lifted our expectations for the fourth quarter as a consequence of this. Our forecast for total full year volumes has therefore risen by 0.5 percentage points.
…Niels Rasmussen said.
According to the International Monetary Fund (IMF), growth in the global economy is expected to slow to 3.0% in 2023 from 3.5% in 2022. The growth forecasts for 2024 and 2025 are 2.9% and 3.2% respectively.
A reduction in growth from 2.9% in 2022 to an estimated 1.6% in 2023 in the Europe & Mediterranean region is the key driver of the lower global growth in 2023. The German economy in particular has struggled and is expected to end the year with negative growth of 0.5%.
Supply
Our forecast for fleet growth in 2023 has been adjusted downwards as it appears that more ships planned for delivery in 2023 than expected have been delayed until 2024. In addition, recycling has progressed more slowly than we expected.
…Niels Rasmussen said.
Recycling is therefore likely to have a greater impact on fleet growth. They now estimate that recycling will reach 180,000 TEU in 2023 and double that, 360,000 TEU, in 2024 and 2025.
The total fleet is expected to hit the 30 million TEU mark in late 2024 and be 31.9 million TEU at the end of 2025. Despite the significantly worsened market conditions, shipowners have already contracted another 1.5 million TEU so far in 2023. The order book has therefore reduced only marginally, with the order book to fleet ratio remaining high at 27% and already now including ships for delivery in 2028.
Supply/demand
Though container volume growth has obviously been lower than many had hoped, it is the supply side developments that are the market’s main challenges. Supply is forecasted to grow at an average annual rate of 8.4% between 2023 and 2025. Even at the best of times, ship demand would not see similar growth.
