9. Outlook


Global activity and world trade picked up in the second half of 2013 and activity is expected to improve further in 2014. According to the IMF, global growth is expected to be slightly higher in 2014, at around 3.7%, compared to 3.1% in 2013. The U.S. economy was performing well in the second half of 2013 driven by improved consumer spending, business investments and net exports. The growth in the U.S. is by IMF expected to be 2.8% in 2014 compared to 1.9% in 2013. The activity in the euro area also improved in 2013 and turned from recession to recovery. A modest pickup is generally expected in 2014 mainly driven by exports but high public and private debt will reduce growth in domestic demand. Growth in the euro area is by IMF expected to strengthen to 1% in 2014 compared to -0.4% in 2013. In China IMF expects growth to moderate slightly to around 7.5% in 2014.

Deliveries of new dry bulk vessels slowed in 2013 and will slow further in 2014. The fleet utilisation should improve further in 2014 as large capacity expansions in iron ore and coal supply coupled with improved macro conditions should increase sea freight demand more than supply.  However, the potential for speed increases in the fleet will make effective supply growth elastic to demand if earnings improve to a level where eco speed is no longer beneficial. Improvement in earnings will likely decelerate once this threshold is passed and the growth in earnings is not likely to accelerate before most of the global fleet is running at full speed.

In the container market the number of newbuildings in the sub-panamax segments for delivery 2014 and 2015 is very limited and with continued high scrapping in this segment and no possibility to order for such early delivery the fleet is expected to shrink in the coming years. Global demand growth is likely to slightly outpace global container supply in 2014. However, the post-panamax and panamax segment is still weighed down by structural oversupply, and therefore the speed and the degree of cascading will stand out as important factors for any possible recovery in freight rates on the individual container tonnage segments going forward.

Klaveness expects increased volumes in contracts of affreightment and vessels under management in 2014. In addition three vessels under construction will be delivered in 2014 and will result in higher activity related to operation of owned vessels.