Maritime Financial Research


Latest Coverage

Maritime Financial Insight - Jun 20

June 2020

Container shipping: Container shipping’s 1Q20 results were strong enough amid the coronavirus (COVID-19) pandemic as the industry found a way to be profitable in the middle of the ongoing crisis. Container shipping demand in some regions such as Europe and the US has started to recover, albeit mildly, as the global economy continues its tentative emergence from lockdown. Yet, this is not a return to normal, but it may only indicate the bottom of the trough. Meanwhile, carriers continue to take record amounts of capacity out of service as idle ships trend higher than ever, supporting freight rates.


Port and terminal operators: In 2Q20, the ample amount of liquidity injected by central banks world over has led the emerging equity markets to surge ahead and cover most of the losses they incurred in 1Q20. This has also widened the divergence between the robust stock performances and weak fundamentals. Cheap valuations also resulted in DPW opting for delisting with rumours rife that CMPorts is getting delisted as well. Even though COVID-19-related uncertainties continue to take a toll on the sector performance, ICTSI’s recent access to capital market shows the confidence investors still have in port stocks.


Dry bulk shipping: COVID-19 will have a severe impact on the demand and supply of dry bulk commodities as the economic activities, which have been halted due to the virus spread, will take some time to restart after the pandemic is contained. As a result, the demand for dry bulk vessels will contract 1.3% in 2020. Additionally, effective supply has increased because the incentive for slow steaming has reduced due to the abysmally low fuel prices. Risks for dry bulk charter rates loom large given the uncertainty regarding the duration of the pandemic, successful development of a vaccine and the response of various governments to deal with the situation.


LNG shipping: COVID-19 induced lower LNG demand is resulting in weakening LNG trade with many LNG cargos being cancelled in the US. LNG supply glut and feeble LNG trade are weighing on spot LNG freight rates. Share prices of key LNG shipping companies have declined 36.8% YTD but those with their fleet on long–term charter have done well with Nakilat stock price up 14.5% YTD. On a positive note, LNG stock prices have been relatively resilient in the last one month and have declined only 2.6% on an average as spot LNG freight rates seem to have found a floor.


LPG shipping: The LPG shipping sector has fared better than its counterparts despite the virus affecting the energy demand. We still retain our positive outlook for the sector for the period between 2020 and 2024, supported by robust annual growth of 3% in the LPG trade during the period. LPG demand from the petchem industry is expected to suffer as petchem owners look to use cheaper naphtha as a feedstock instead of LPG. Meanwhile, petchem and ammonia trades will contract in 2020 due to weak demand amid oversupply. Overall, LPG trade is expected to grow at a low 0.8% in 2020.


Crude tanker shipping: Historic production cut by OPEC+ coupled with well shut-ins in the US played a key role in rebalancing the demand and supply of crude oil. Meanwhile growing oil demand with gradual opening up of economies also facilitated the inventory draw down from on-the-water crude oil stocks and eased the supply of tankers. The increasing supply of vessels and softening demand on account of production cuts led to a sharp correction in vessel earnings in May and June. As a result, the day rates of tankers on key trading routes nosedived across vessel classes in the past two months. VLCC earnings on Middle East-China (TD3C) plunged 92% to ~USD 20,100pd on 30 June from a hefty ~USD 250,000pd in mid-March. TCE rates on major trading routes are expected to slide further in 3Q20 across vessel classes, but we expect vessel earnings to recover with increasing demand for vessels in 4Q20 and 1Q21.


Product tanker shipping: Product tanker freight rates and asset prices have plummeted in the last one month as vessels supply has increased while global oil demand has been weak. We expect product tanker rates to continue to decline until 3Q20 on account of high vessel availability and weak product tanker trade. Recovery in 4Q20 hinges on the pandemic being contained or a vaccine being found.

FREE TRIAL to our Financial Research Service

Disclaimer: Important Information

Whilst the Company believes the information it uses for research is from sources believed to be reliable, the Company does not make any representation or warranty, express or implied, as to its accuracy, completeness, timeliness or correctness for any particular purpose. The opinions and estimates included herein reflect the analysts’ views based on available information on the dates specified and these views may have changed without notice. Any recommendation contained herein does not have regard to the specific investment objectives, financial situation and the particular needs of any specific client. The information herein is published for clients only and is not to be taken in substitution for the exercise of judgement by the client, who should obtain separate legal or financial advice. The Company, or any of its related companies or any individuals connected with the Company, accepts no liability for any direct, special, indirect, consequential, incidental damages, or any other loss or damages of any kind arising from any use of the information herein (including any error, omission or misstatement herein, negligent or otherwise) or further communication thereof, even if the Company or any other person has been advised of the possibility thereof. The information herein is not to be construed as an offer or a solicitation of an offer to buy or sell any securities, futures, options or other financial instruments or to provide any investment advice or services. The Company and its associates, their directors, officers and employees may have positions or other interests in, and may effect transactions in, securities mentioned herein. DFRS does not seek to do business with any of the companies mentioned other than sell them these reports. However, other related parts of Drewry Shipping Consultants Holdings Limited may seek to provide "advisory services or the sale of other group research products" to companies mentioned in this report.



The distribution of this email is governed by the UK Financial Services and Markets Act of 2000 (the “FSMA”) and is restricted to qualified parties as defined by the FSMA. The distribution of this email may be restricted by rules and regulations in certain jurisdictions. Persons into whose possession the email may come are required to inform themselves about and to comply with all applicable laws and regulations in force in any jurisdiction in or from which it invests or receives or possesses this email and must obtain any consent, approval or permission required under the laws and regulations in force in such jurisdiction.


For US Investors

Drewry Financial Research Services (DFRS or the “Company”) is an independent research company and is not a registered investment adviser and is not acting as a broker dealer under any US federal or state securities laws. The Company does not provide individual investment advice or hold client money. As such, the Company is not required to be registered as an investment adviser.

Related News

Drewry launches COVID-19 special report assessing the financial health of the container shipping industry

In this 50-page special report, Drewry’s investment research team updates its independent assessment of the financial health of the box shipping industry. The full report is now available to purchase online.

Secondary offerings steal limelight in 2018, but will IPOs make a comeback in 2019?

Despite low levels of interest in shipping IPOs in the US over the last few years, listed shipping companies continue to raise money through secondary/additional offerings and bond offerings in the US market.


$6bn: The combined value of container shipping industry investments we have advised on since 2010.


$20bn: The value of financing projects we have provided commercial due diligence advice for in port M&A since 2010.


The number of countries in which our advisors have completed assignments since 2005.


Our advisors have been involved in over 400 port assignments over the past 10 years.
Latest Coverage
Our equity research service provides our clients with a range of report formats and supporting resources for the companies we cover.

Market understanding

Investment analysis based on a clear understanding of the market at both an industry and sector level.

Quality insights

Our analysts have access to one of the most up-to-date, comprehensive and reliable sources of market insight.


Type of Report



ZIM - Is the timing right for an IPO?

Event Update23 Sep 2020PDF

Lacklustre returns for product tankers despite record earnings

Event Update18 Sep 2020PDF

Euronav NV - Stock price decoupling from fundamentals

Event Update11 Sep 2020PDF

HHLA - Mid year outlook 2020

Financial Research Report09 Sep 2020PDF

Wind turbine installation vessel business - Reprieve or a debt trap for Scorpio Bulkers?

Event Update04 Sep 2020PDF

Teekay Tankers - Strengthening the balance sheet is priority

Financial Research Report28 Aug 2020PDF

DP World moves further ahead into vertical integration

Event Update26 Aug 2020PDF

AP Moller-Maersk 2Q20 - Result update

Financial Research Report20 Aug 2020PDF

Star Bulk - Is the worst behind us?

Financial Research Report20 Aug 2020PDF

Dalian Port Company - Port sector consolidation - eases competitive landscape

Financial Research Report29 Jul 2020PDF

View more