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SHIPPING NUMBER OF THE WEEK
Due to the COVID-19 pandemic, the global container market grew only 1.5% from 171.0 million TEU in 2019 to 173.5 million TEU in 2023. Without the pandemic, that figure would have been 24.6 million higher, landing at 198.1 million in 2023.
September 2022
Ukraine exports reach 2.1 mln tonnes under grain deal, Russia raises fresh concerns
On 22 July, Russia and Ukraine signed an agreement to allow grain exports from three ports in Ukraine during a period of 120 days. On 7 September, Putin expressed concerns over the agreement, giving rise to uncertainty about its scope and renewal.
Fresh stimulus could boost Chinese iron ore imports, down 3.3% YTD
Preliminary shipping data from Oceanbolt shows a 1.7% y/y drop in Chinese iron ore import volumes in August. The volumes are, however, the highest since January and follow a 3.1% y/y increase in July. Year-to-date, Chinese iron ore imports are down 3.3% y/y, making up around 20% of global dry bulk volumes, but could be in for a bounce, benefitting the struggling Capesize segments.
August 2022
China’s July crude oil imports hit 4-year low and drops 9.2% y/y
China is the world’s largest importer of crude oil, accounting for approximately 25% of global crude import volumes. The country’s crude imports are also equal to about 25% of global seaborne crude oil volumes which contributed to about 30% of dirty tanker trade tonne miles in 2021 according to Signal Ocean statistics. From 2010 to 2020, China’s crude imports grew at an average annual rate of 8.5% and have been the key demand driver for both crude oil and crude tanker demand.
Container fleet growth up 11.6% from June 2019, catching up with transport demand
Initially, the COVID-19 pandemic and mobility restrictions across the world led to much lower transport demand in the container sector. In the 3rd quarter of 2020, however, demand jumped as consumers converted spending on services to higher spending on goods. Freight and time charter rates have since reached historically high levels as congestion has increased the strain on supply. Now, the size of the container fleet has, however, caught up with transport demand.
Indonesia blocks exports from 48 coal miners as EU’s Russian coal ban begins
On 9 August, the Indonesian Energy and Mineral Resources Minister announced that 71 coal miners failed to meet their domestic market obligations, and that 48 of them are now banned from exporting coal. The ban comes into force just as the EU ban on Russian coal takes full effect and demand for non-Russian coal increases.
EU retail sales volumes fall 1.3%, indicating further weakening of container imports
Retail sales are a key driver of European container imports. In early 2020 and early 2021, retail sales volumes in the EU and the UK suffered setbacks due to COVID restrictions but recently, high inflation and historically low consumer confidence have been the main concerns.
July 2022
Grain agreement could see 65% of Ukraine’s seaborne capacity reopen
On 22 July, Russia and Ukraine signed an agreement with Turkey and the United Nations to allow grain exports from three ports in western Ukraine: Yuzhne, Chornomorsk, and Odesa. Combined, the three ports accounted for 65% of the country’s total grain exports over the past five years. Exports could, however, face several difficulties.
Tanker contracting only 1.6m DWT in first half of 2022: lowest half year on record
Between 1996 and 2021, the lowest half-yearly tanker contracting volume was 3.0m DWT, recorded in the first half of 1999. Despite improved freight rates and a more positive market outlook, the first six months of 2022 ended with barely more than half that volume: only 1.6m DWT was contracted. Consequently, the order book to fleet ratio has fallen to 5.1% for both crude and product tankers, a ratio which is also the lowest since 1996.
Iron ore exports to China fell 3.2% in the first half of 2022
In the first half of 2022, the Chinese economy was plagued with weak demand and low economic growth, driven in part by their zero COVID policy. The country’s weaker economy caused a lower demand for steel, meaning that production fell by 8.7% y/y as of May.
Crude oil at lowest since April; Brent at USD 103 and WTI dips below USD 100
Immediately following Russia’s invasion of Ukraine on 24 February 2022, crude oil prices increased on fears of supply disruption. In less than two weeks, Brent prices rose from USD 97/barrel to USD 128/barrel. Since then, Brent prices have consistently been above USD 100 and above USD 110 since mid-May. On 5 July, Brent dropped to USD 102.77 and WTI ended at USD 99.50. Some analysts now predict even lower prices before the end of the year.
