Friday Big Picture Report Archive

July 14th 2017

Electric Vehicles Charging up

The share of electric vehicles (EV) in today’s passenger vehicle fleet is small. According to the IEA, they represent 0.2% of light-duty vehicles. These EVs rely heavily on government subsidies; they lack the driving range and physical size that much of the market currently demands; the batteries that power them face severe production capacity constraints. But none of this stops oil analysts worrying about the damage they will do to oil demand. And as each successive government or car manufacturer adds themselves to the list of advocates (most recently Volvo, which last week announced it will only sell new EVs from 2019) those worries mount. When should investors in oil tankers start taking this threat seriously?

June 29th 2017

Chinese Coal Port Ban  Changing the rules

In early May, we wrote about how Chinese policy decisions were having a knock on impact on the freight market, concluding with the following comments… [the] biggest concern for the future of the freight market [is] the ability of the Chinese government through its policy decisions to control how it moves. Whilst there is no implication that the Chinese government is looking to directly impact on international seaborne freight rates, the tools it uses to control the domestic economy can only be finessed to a degree and there are inevitable knock on impacts into dry bulk”

June 22nd 2017

The Growing Orderbook  Bigger than before

So far this year, we count 26 confirmed new orders for dry bulk vessels. This is a pretty derisory number and continues a trend running from the start of 2016,  since when orders for just 43 ships have been placed — easily the lowest 18 month total in the last 40 years. This is good news for those worried about future deliveries tipping the supply-demand balance in an unfavourable direction, but it is clearly not enough to keep the shipyards busy, even with an uptick in ordering in other vessel sectors.