Navios Maritime Partners hopes for more robust container trade
Navios Maritime Partners hopes for clear sailing next fiscal (Part 10 of 11)
Container trade growth
Navios Maritime Partners (NMM) is focused on the container segment where activity is improving. This segment has a strong correlation to US personal consumption expenditure growth. And, lower oil prices are contributing to greater US consumption. The PowerShares DB Oil Fund ETF (DBO) tracks the relative performance of crude oil.
Over the past 18 years, container trade has expanded at a 3.5% target rate. The rate of growth has been increasing since 2012 and is expected to continue this way over the next two years, reaching 6.8% by 2016.
Container fleets
At the end of 2014, the container fleet included 5,100 vessels. During the year, 201 vessels were delivered and 171 vessels were scrapped. The scrapping of old, inefficient vessels continued with the removal of 381,000 TEU (twenty-foot equivalent units). The fleet expanded by 6.45% due to massive vessels joining the fleet. This was slightly more than the 6% estimated growth in trade volumes. In 2015, estimated trade growth stands at 6.7%.
Fleet
In 2014, about 48 million dead weight tonnage was delivered out of an expected 75 million. Through the first three weeks of 2015, 16 million dead weight tons were scrapped. The current rate environment encourages the scrapping of older vessels. And, given that almost 11% of the fleet is more than 20 years old, there’s about 82 million dead weight tons of scrapping potential out there.
Net fleet growth in 2014 was 4.4%, and 2015 projections are for similar or lower levels. The dry bulk market is expected to remain slow during the first half of the year but may begin to rise in the second half. This may have a positive impact on dry bulk companies like Safe Bulkers (SB), DryShips (DRYS), and Diana Shipping (DSX).
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