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SHIPPING NUMBER OF THE WEEK
In 2023, 2.3 million TEU of container ship capacity was delivered, beating the former all-time high by 37%. Year-to-date another record has been set as more than 1 million TEU has already been delivered during the first four months of the year, an increase of nearly 80% compared to the previous record.
July 2022
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.
June 2022
China’s seaborne import of Russian crude jumps 51.4% in May
China’s crude oil imports have doubled from 2011 to 2021 and now account for 20% of global seaborne crude oil volumes.
Boost in orders for ships below 8,000 TEU drives order book to 17.3% of fleet
In October 2020, the order book for new container ships bottomed out at 8.4% of the combined trading fleet. For ships smaller than 8,000 TEU, the order book bottomed out one month later at 3.7% of the trading fleet, and only accounted for 18.2% of the total container order book. Interest in the smaller segments, however, is bouncing back after months of hibernation.
Argentina’s wheat export quota cut by 31% for 2022/23 marketing year
President Alberto Fernández recently pledged that Argentina would seize the opportunity to help meet global wheat demand while taking advantage of the high prices following Russia’s invasion of Ukraine. A poor harvest, however, could change the picture.
May 2022
Airline capacity 37% lower than 2019, curbing demand for jet fuel
In 2019, prior to the onset of the COVID-19 pandemic, jet fuel contributed an estimated 8% of oil products’ cargo demand. When travel restrictions were imposed during the pandemic, air travel suffered significantly and jet fuel shipments in 2021 were down approximately 33% compared to 2019. Airlines’ capacity has been on a slow recovery path since bottoming out in April 2020 but remains significantly lower than 2019 levels.
India’s coal import decision to reverse 10% YTD drop and add tonne miles
In a notice released on 5 May 2022, India’s Ministry of Power instructed all power plants to increase their imports of coal. Specifically, the Ministry demands that power plants designed to run on domestic coal start importing at least 10% of their requirements.
March retail volumes at 0.0% m/m as EU retail trade stagnates
As European Union retail trade stagnates, the question for the Far East to Europe container trade will be whether consumers will buy less or cheaper.
April 2022
Russia-China dirty tanker trade soars 94% y/y after Ukraine invasion
China is the world’s largest importer of crude oil and Russia is the second largest crude exporter. Much of the crude oil trade between the two countries, however, is piped and the short distance from Far East Russia to China also limits the impact on demand for crude oil tankers. Still, a change in the Russia to China dirty trade has the potential to impact tanker tonne miles demand as it could come at the expense of longer trade lanes.
