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5 January 2017
2017: Brokers pull out crystal ball

TradeWinds surveys leading names in the shipbrokerage sector about their expectations for this year.
Tim Jones, CEO, BRS Brokers
"The industry has been focused for some years on the (over) supply side of tonnage and it finally looks like some real efforts by the industry are paying off. Scrapping and lay-ups in the bulk sector, lay-ups or stacking in offshore, redeployment and/or idling in containers, as well as massive reductions in world yard capacity are starting to be felt on the supply side of the equation.

The demand side has become too unpredictable to give us any sense of ongoing stability: the Chinese battle with environmental issues, IMO regulations on low sulphur fuels, OPEC quotas, coal versus alternative energy sources, the return of shale gas, Trump’s announced trade barriers and the ensuing retaliations, China increasing iron ore imports, the price of coal and its resurgence, SECA [sulphur emission control areas] deviation tonne-miles. A lot of elements that are hard to predict and being wrong on any of them can change quickly the overall balance.

Nevertheless, it is clear to us, sitting in the middle of all these markets, that the worst is behind us. But navigating the funding challenges, the extreme swings in values, the continuing string of bankruptcies (getting caught in someone else’s mess) are going to make 2017 a challenging year, although one that will see more positive undertones and improved opportunities to take longer-term positions.

Nimble and flexible, with the willingness to adapt, will be the key to success. If yard capacity continues to decrease and there is restraint at a political level not to subsidise resurgent capacity, the demand/supply balance, which we feel is getting closer, will again be felt as tremors and market tensions surge and recede. BRS wishes all our clients a successful and healthy 2017."

Source: Tradewinds

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