Maritime Financial Research


Latest Coverage

Maritime Financial Insight

June 2019


Download the June report


Container shipping

That the container shipping market is facing a tough time is evident from the latest 1Q19 financial results where two of the largest carriers, Maersk Group and CMA-CGM, posted negative results. To worsen matters, overall debt levels for most carriers have risen significantly. While the pursuit of vertical integration strategies has contributed, part of the problem also lies in the new IFRS 16 lease accounting standard, which forces carriers to put their long-term lease obligations on their balance sheets. On the macro front, the IMO regulatory rules, especially those governing ballast water exchanges and low sulphur fuel, will prove to be disruptive. The demand side issues are clouded by uncertainty amid global sanctions on Iran and Venezuela, the ongoing trade war, Brexit, among others.


Port operators

The extended trade war is tipping the scale of the container handling industry as volume growth shrinks and returns squeeze. The sector is grappling with heightened competition as excess capacity and underutilization eats into top-line growth. We anticipate demand for container handling to lag supply and therefore the keep prices ’in check’. Sector profitability generally is not a bright spot as new IFRS 16 rules will mean higher interest expense which in turn will hit their bottom-line.


Dry Bulk shipping

The charter earnings are expected to increase in the remaining quarters of 2019 as demand for dry bulk vessels stabilises. The operational disruptions at Vale’s iron ore mines see a slow recovery amidst a tight global supply. However, the overall recovery in charter rates in 2Q19 will mainly depend on how quickly Vale resumes operations at full capacity. Meanwhile, long-term recovery in dry bulk fortunes will depend on the extent of demolitions on account of IMO regulations.


LNG shipping

LNG spot rates are on recovery path after seeing a low in March. Short-term and long term LNG charter rates continue to be resilient on account of long term positive outlook in the sector. Despite China’s increase in tariff on US LNG imports, US projects continue to move ahead. LNG stock prices have been weighted down by the market concern on US-China trade war, seasonal weakness and low LNG spot prices.


LPG shipping

In the LPG shipping space, the Baltic LPG Index closed at USD 77.42 per tonne on 17 June 2019 – the highest since January 2016. VLGC earnings surged 138% m/m in April to reach USD 42,600pd due to loading delays the US Gulf reducing vessel availability. The market defied the odds and continued its bull run, and the vessels are being fixed at around USD 70,000pd in the third week of June as vessel availability remains relatively tight. We believe this is a short-term phenomenon and rates will stabilise after a correction in 3Q19 before picking up again in the latter months of 2019 on the back of strong winter demand.


Crude Tankers

Crude tanker shipping stocks generated an average return of 25.5% YTD, despite a correction of 12.6% in the past one month ended 20 June. We believe the stocks might decline further in the seasonally weak summer, but the prospects of Crude tanker shipping market are bright on the back of improved market dynamics. We expect the stocks under over coverage to book significant gains towards the latter months of the year.


Product Tankers

The product tanker market witnessed firm charter rates in the first quarter mainly supported by declining orderbook to fleet ratio and seasonal strength. Also, the companies reported a strong quarter financially. However, In the second quarter, product tanker freight rates declined as refinery runs came down.

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

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.

Drewry launches special report: Hyundai Merchant Marine (HMM) - what lies ahead?

Drewry Financial Research has conducted an in-depth assessment of the issues facing HMM and their future prospects with consideration given to current and anticipated future market conditions.


$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



Maritime Financial Insight - June 2019

Maritime Financial Insight 26 Jun 2019 PDF

ICTSI 1Q19 - Result update

Financial Research Report 17 Jun 2019 PDF

Diana, Star Bulk and Golden Ocean - Is the worst behind them?

Financial Research Report 11 Jun 2019 PDF

Cosco Shipping Ports 1Q19 - Result update

Financial Research Report 07 Jun 2019 PDF

Pacific Basin - Company update - May 2019

Financial Research Report 22 May 2019 PDF

Scorpio Bulkers 1Q19 - Result update

Financial Research Report 17 May 2019 PDF

HHLA FY18 - Result update

Financial Research Report 24 Apr 2019 PDF

LNG Shipping 2019 - Sound prospects to drive earnings

Financial Research Report 02 Apr 2019 PDF

Ports Outlook 2019

Financial Research Report 26 Mar 2019 PDF

Maritime Model Portfolio - March 2019

Model Portfolio 18 Mar 2019 PDF

View more