New Expectations for Shipowners’ Investment.

After five years of “dancing with the bear”, has the sharpest slump in commodity prices in recent history come to an end? From the perspective of Suzhou Cosc Marine Machinery, a review of the four major commodity price crashes over the past 50 years reveals clear cyclical patterns: every sharp downturn in commodity prices has been followed by a rally. Judging from the historical cycles of commodities, a new major commodity bull market is likely to kick off within two to three years. A new landscape for commodity markets may emerge and keep strengthening, marked once again by supply‑demand imbalance — demand far outstripping supply, with average commodity prices rising substantially.

Suzhou Cosc Marine Machinery holds that future new entrants to the shipping market will more likely be cruise‑ship owners and owners of special‑purpose vessels, such as car carriers, ro‑ro passenger ships and icebreakers. Driven by robust demand from the Chinese market, the luxury cruise market will maintain steady growth over the medium‑to‑long term.

Strategic investment will become the prevailing tendency and may serve as the most important mode for major shipowners to re‑enter the market. Meanwhile, uncertainties stemming from the Brexit referendum will weigh on economic growth in the United Kingdom, Europe and the rest of the world. This will most likely force central banks worldwide to keep large‑scale, unconventional stimulus measures in place for longer periods, thereby extending the duration of low‑interest‑rate environments.

Suzhou Cosc Marine Machinery forecasts that over the next two years, backed by low borrowing costs and reversed market expectations among shipowners, major shipowners will gradually step in to make market arrangements. The gloomiest phase of the global shipping market will then be over.