Record lows straight ahead
The eventual delivery of a towering orderbook currently at ~30% of the fleet has been in the offing for some time. Still, the implications of the resulting oversupply could be overwhelming for several of the stakeholders in the industry as we foresee record-low utilisation by 2024e. We believe once-strong balance sheets will be tested in order to find an equilibrium and the lowest-cost providers will be the ones left standing, with a 5% annual demand boost needed to even the balance by 2026e. We find A.P. Møller Maersk and MPC Container Ships well placed to weather the storm, but limited scope for optimism should continue to weigh on the stocks.A.P. Moeller Maersk is an international shipping company. Co.'s operating segments are: Container shipping and related activities which include global container services, inland transportation, manufacturing and repair of containers and container depots, and logistics and forwarding activities; APM terminals; Tankers, offshore and other shipping activities which include tanker shipping of crude oil, oil products and gas, offshore drilling activities and operation of land rigs, supply vessel activities with anchor handling and platform supply vessels, ferry services and door-to-door transportation in Northern Europe; Oil and gas activities; Retail activity; and Shipyards and other activities.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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