The latest edition of the multipurpose Market Sentiment Index, issued by One World Shipbrokers, has continued its rise in overall sentiment, for the third time in five polls. The MSI level has increased from 52.4 in the previous edition, to 53.6.

The multipurpose sector is experiencing a decrease in the amount of cargo that can be transported due to the war in Gaza. This has led to carriers opting for longer routes such as the Cape of Good Hope, instead of using the Panama Canal. Although there have been some reports that the rain has started falling in Panama, which has resulted in lower auction rates and reduced waiting times, the situation may still be affected by scheduled lock gate maintenance that is expected to take place in the middle of the year. This could potentially restrict the movement of cargo in the medium term.

With the spillover of the war in Gaza already a threat to shipping in the Gulf of Aden the recent escalation involving Iran adds increasing uncertainty as to when the area will be deemed safe enough for regular GoA / Suez passages to resume.

Whilst these events are a challenge to shippers and cargo interests, carriers are benefitting. The gloom from the unexpectedly soft second half of 2023 has dissipated and 75 per cent of carriers responding to this poll are reporting higher freight rates, increasing cargo volumes and longer forward order books than the previously reported period.

In particular optimism towards projects is improving. The wind sector has underperformed in recent times as project costs have been undergoing a reset owing to high inflation, cost of capital and consumer pricing but that is expected to conclude this year with postponed projects likely to clash with new projects accelerating new demand.

The Global Wind Energy Council (GWEC) reported this week that the industry must install at least 320 GW a year by 2030 to meet emissions reduction targets agreed at COP 28. “It took us over 40 years to reach the 1 TW mark of worldwide installed wind power,” said, GWEC’s Chief Executive Ben Blackwell. “We now have seven years to install the next 2 TW.”

As the northern summer season approaches carriers would normally expect a slowdown in activity but with the MSI Future Index (a measure of confidence in the next six months) ticking higher to a level not seen since the beginning of 2023 there is a sense among carriers that the mixture of supply constraints and supportive demand will continue.

One World Shipbrokers forecast for the next 12 months has the multipurpose MSI sentiment set at 55.4.