JP Morgan has cut back its capesize rate forecasts for this year and next after a disappointing end to 2018.
Analyst Noah Parquette said his expectations for this year were modest given deteriorating demand growth with the sector remaining an “IMO 2020 story”.
Parquette’s revisions come given lower demand projections at a time there are no alarm bells on the supply side.
JP Morgan is now charting capesize rates of $14,000 per day this year, a $3,500 per day reduction on his earlier forecast.
A jump to $23,000 per day in 2020 is now projected, a $3,000 per day drop from what Parquette previously had penciled in for the ships.
However, the analyst believes the turn of the decade will mark the peak of the capesize cycle.
He sees rates for the ships dropping to $19,000 per day in 2021 and $17,000 per day in 2022.
“We continue to expect 2020 to be the cycle peak on the back of positive speed effects from IMO 2020,” Parquette said.
