Crude Tanker Shipping 2019 - Gradual recovery on horizon
The crude tanker market remained weak in the initial nine months of 2018 as vessel earnings remained below breakeven across vessel classes. However, elevated scrapping activity during the year kept a check on fleet growth, and vessel earnings improved in the fourth quarter of 2018. Unlike others, the stocks of Frontline and DHT Holdings generated an overall return of 20.5% and 9.2% in 2018, respectively. The stocks moved on anticipated lines following our upgrade in August 2018. Few stocks such as Frontline and DHT Holdings crossed our fair value estimate. However, all stocks plunged in December 2018 due to the sell-off pressure on New York exchanges.The tanker market has bottomed out in 2018, and we expect a gradual recovery over the next three years as a higher number of demolitions will facilitate market re-balancing by limiting the supply side growth. We expect the stocks to gradually follow the upward trajectory in the second half of 2019 given the optimistic outlook and hence, have awarded ‘Attractive’ rating to tanker stocks under our coverage.
Drewry, since 1970, has been providing research and advisory services on the global Maritime and Shipping industries and has established itself as a firm with long history of credibility and expertise on various aspects of the maritime industry. Leveraging this in-depth market knowledge and understanding, we have extended our offering to deliver a unique, independent investment research service on globally listed companies operating in the maritime industry. Under the brand Drewry Maritime Equity Research and in accordance with the FCA, DMER led by Rahul Kapoor and his team, offers fundamental analysis on listed companies. DMER analysts have access to one of the most up-to-date, comprehensive and reliable sources of market insight and research data available today. By combining these market-leading resources with seasoned sector expertise and commercial awareness, we are able to offer a highly differentiated and comprehensive investment research service to prospective investors in listed maritime companies. We look at globally listed companies within the following sectors: Port Operators, Container Shipping, Container Manufacturing & Leasing, LNG Shipping, Dry Bulk Shipping and Tanker Shipping. Combine in-depth sector expertise with financial analysis focusing on over 50 stocks globally.
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