Shipping companies such as Bermudian-based Frontline, Nordic American Tankers and Teekay Tankers are likely to see steady improvements to market conditions this year.

That is the takeaway view from a market report by international shipping association Bimco.

The Baltic and International Maritime Council has labelled last year as one of change “much of it for the better” and it cautiously believes that progress can be maintained this year.

“Economic growth has accelerated in Europe, Asia and the Americas since mid-2016, and the IMF now expects the global GDP growth rate to raise slightly in 2018 to reach 3.7 per cent, up from 3.6 per cent in 2017,” noted Bimco in its Market Reflection report.

It forecasts the dry bulk sector is set to maintain the balance it achieved last year, and the container shipping sector is on track for a rate of fleet growth this year matching the growth in demand and therefore no big freight rate changes are expected to lift earnings.

Bimco believes there is a potential upside in low fleet growth for crude oil and oil product tankers.

“The growth in demand — coming from increased oil consumption and a return of more price arbitrage-driven trading activity — depends on a better-balanced oil market,” it reported. However, increasing demand for oil will only marginally outstrip supply, which will be a negative factor for the oil tanker market.

According to Bimco: “Not until we see global oil stocks at a much lower level, can we expect a renewed interest in seaborne oil trading activities that will lift oil tanker demand from its current subdued level. However, the first half of 2018 may pass by before that happens.”

Increasing oil imports in the Far East, and growing oil exports from the US, are set to benefit operators of VLCC (very large crude carriers) and “to some extent” Suezmax-sized tankers. Nordic American Tankers operates a 30-strong fleet of almost identical Suezmax tankers.

Regarding the container ship sector, Bimco noted that nominal fleet growth for the next few years will be about 4 per cent, leaving “little room for fundamental market balance improvements”.

It added: “As a result, increased earnings must come from continued cost-cutting exercises and permanent slow-steaming to keep fuel costs on a tight leash. On top of that, operational efficiency gains and positive demand growth gain more boxes on the individual ships.

“The latter means harvesting some of the economies of scale the industry relies heavily upon — with the large volumes coming from front-haul trades.”