The market for both shipping investments and maritime asset management is highly volatile given its explicit (and implicit) connectivity to macro-economic variables.
In stable equilibrium times, we see a market perturbations as a result of "bottom-up" economics, that is a micro industry change to either supply demand affecting macro industry cycles. This is has generally been the case with Oil Tanker (with the exception of Oil Embargo), Bulker (with the exception of China entrance to WTO) and LNG Carriers (perhaps with the exception of today?) where the demand for their shipped products are a result of within-industry demand.
More generally today, we are seeing a causality shift towards macro-economic events affecting the micro-economic of the industries. This has been most evident in containers, where the COVID considerations impacted demand for ships in an otherwise stagnant (pre-COVID) market. We see this trend moving to impact LNG Carrier given the secular trend toward greener power-gen, as well as Bulker (for a diverse set of reasons) and Oil Tankers generally.
To understand the macro to micro elasticity effect, we look at energy commodities, specifically their market structure, and how these prices (which presume to capture all market information), may impact either EBITDA, COGS or both for the different asset classes. With more energy commodities / alternative fuels in backwardation, volatility is expected which may undermine sustainable investment decisions and thus the energy transition generally....
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