Have you heard the one about the business that claimed defensive qualities in a downturn? Only a million times. One-liners are not Clarkson’s core competence, it seems. Appropriately so: the UK broker operates across a range of shipping businesses. This distinguishes it from Maersk, the Danish containers group that recently forecast a demand drop of 1-4 per cent this year.
Consumers are feeling the pinch from inflation and higher interest rates. But broader shipping rates should get a lift from energy insecurity, the green transition and a capacity pinch, Clarkson expects. Revenues rose to £321mn in the six months to June, according to an upbeat statement.
Rerouting of oil and fuel shipments due to the war in Ukraine is keeping tanker rates high. Chinese and Indian refineries have stepped in to cover lost Russian supply. Tonne mileage rose almost 10 per cent and 8 per cent for crude and product carriers in the first half of this year, reports trade body Bimco.
Supply chain greening adds to the market imbalance. As indirect or Scope 3 emissions grow in importance for customers and investors, shippers are adjusting. Some 60 per cent of the world order book by tonnage is for vessels powered by alternative fuels such as natural gas, not dirty marine diesel. Demand for space on newer, cleaner ships seems certain to rise.
A crunch in global shipbuilding capacity may also support earnings from tanker broking.
Clarkson thinks there are 40 per cent fewer large shipyards today than a decade ago. Most are busy building container ships and natural gas carriers. Total global tonnage is expected to increase just 2 per cent next year, the slowest in two decades. Orders for new crude oil and product carriers are at historic lows.
Clarkson shares have dropped almost one-third from their 2021 peak. The “defensive qualities” claim is a chestnut as old as jokes involving poultry and road crossings. But a structural squeeze on tanker rates should persist beyond the current economic downturn.
Source: Economy - ft.com
