After an influx of mega containerships distorted the market, pushing freight rates down in 2015 and most of 2016, the trend appears to have been reversed, says New York stock watcher Seeking Alpha.
But is this above average demand the new normal or perhaps a not so rare deviation which will soon be corrected, asks Seeking Alpha writer James Catlin.
A massive influx of container capacity brought on by the advent of mega ships able to carry well over 15,000 TEU began distorting the market back in early 2015, he said.
"Initially, many including myself thought a correction would take a few years to play out. But as noted in my latest Container Shipping Supply Side Update, there have been unprecedented steps taken to correct this problem," he said.
These measures have provided some relief to the segment and even contributed to a hastened recovery effort.
But one thing that wasn't discussed in that supply side focused article was the well above average demand seen recently. In my research, I failed to find a single analyst that predicted this turn of events before it happened. Obviously, this caught the market (and admittedly myself) off guard, but now many have had time to digest this shift so let's take a look at what happened and what some predict for the future, he said.
Some of the containership companies traded in the US market include Seaspan Corporation (NYSE:SSW), Costamare (NYSE:CMRE), Diana Containerships (NASDAQ:DCIX), Global Ship Lease (NYSE:GSL), Danaos Corporation (NYSE:DAC), Ship Finance International (NYSE:SFL) and Navios Maritime Partners (NYSE:NMM).
Let's start with a review for the last 10 years of global container shipping demand growth ending with data from the first half of 2017.