Danish Ship Finance: Product, chemical and LPG tankers show promise

Danish Ship Finance considers the freight markets for product, chemical and LPG tankers slightly promising, while words like ‘bleak’ and ‘weak’ are used to describe the dry bulk and container markets.

While the container and dry bulk segments should not revel in the prospects of 2012 too soon, the research department of Danish Ship Finance views parts of the tanker market somewhat positively. This is evident in the “Shipping Market Review”, which was published Wednesday.

“The prospects for chemical tankers are relatively good. The growth in demand is expect to surpass the growth in supply by two percentage points in 2012, while the chemical tanker fleet is expected to grow by three percent and distance-adjusted demand with five percent,” writes Danish Ship Finance in the analysis.

Analysts at Danish Ship Finance also expect a strong increase in the demand for LPG transport (Liquefied Petroleum Gas), while the product tanker market receives the following comment: “In 2012, the gap between supply and demand will be further narrowed despite the fact that a too-high supply level will probably continue, at least through 2012,” writes Danish Ship Finance of the product tanker market.

Persisting problems in three segments

On the other hand, analysts hold less positive expectations toward both container and dry bulk markets and crude oil navigation. In all three segments, a great increase of tonnage during 2012 is alarming.

“More ship segments are faced with low freight rates and falling asset values. Moreover, they must deal with a situation in which, in the short and medium-length term, the risks of escalating excess capacity problems cannot be overlooked,” writes Danish Ship Finance.

Still, it is not altogether impossible that the three segments will spot some rays of comfort, stresses Danish Ship Finance.

“Previous shipping cycles have taught us that occasional jumps in freight rates can occur even in markets experiencing a downward trend,” maintains Danish Ship Finance.

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