The Winter 2025 edition focusses on key trends from the fourth quarter and explores potential market developments in the short to medium term.
Great Expectations
Great things were expected heading into Q4 for dry and tanker markets, but both largely underwhelmed. Drybulk sectors, particularly Kamsarmaxes struggled in Q4, with earnings and values falling. Tanker markets diverged. Crude tanker rates saw quarterly averages increase, though not to the stratospheric levels many hoped for. Product tanker rates fell ~30% QoQ but remained above long-term averages. Containers, however, remained healthy and 2024 ended up being the container market’s best ever year outside of the pandemic.
Where did it all go wrong?
Tepid Chinese crude demand, with crude imports falling for the first time outside of the pandemic, meant OPEC+ keep its output restrictions in place. As a result, there was a lack of barrels on the water to drive tanker markets. Weak grain trades in Q4, particularly Brazilian corn, hampered the Kamsarmax market. The seasonal boom for Capesizes failed to materialise as Chinese appetite for iron ore started to slow down. Front-loading of cargoes in anticipation of tariffs and some congestion in the US helped to support the container market, despite the 10% fleet growth seen in 2024.
2025: Tariff Torment and Red Sea Return?
The prospect of fresh US-China tariff wars casts a shadow over the global economy and the container trade in particular. Drybulk markets may also be nervous, while tanker markets will fear the impact on global growth but may welcome the extra volatility and arbitrages created by them.
All sectors, especially containers, received support from longer voyages and extra tonne-miles due to Red Sea diversions. An Israel – Hamas ceasefire raises the prospect that these gains may be lost in 2025, albeit the ceasefire is likely to be fragile. A Red Sea return hangs over the container market like a Sword of Damocles, threatening to expose the market’s overcapacity, the container fleet will be ~26% larger by the end of 2025 than it was at the start of 2023. Crude tanker markets will continue to see negligible fleet growth, but product tankers will start to see deliveries ramp-up. Drybulk fleet growth will remain persistent but not catastrophic.
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