Maritime disruptions in the Suez Canal and Red Sea
Attacks on container ships in the Red Sea and Suez Canal have caused major shipping lines worldwide to suspend their transits in the area, which is a strategic rendezvous point. A domino effect on world trade is expected, which is of concern to the industry, as around 10 percent of global trade passes through the Red Sea, including 30 percent of global container traffic. This includes possible delays in cargo movement in different regions, increased pressure on alternative transport routes and increased demand for transport services in unaffected areas.
According to an analysis by logistics company MTM Logix, bunker adjustment factors (BAFs), general increase in transport fares, and some war surcharges are expected to be implemented in the coming days, affecting not only diverted services, but potentially all services due to the interconnected nature of global shipping networks.
Dry bulk market: Australian iron ore exports reach new all-time high
Iron ore exports from Australia have been on the rise during 2023, reaching a new all-time high. In its latest weekly report, shipbroker said that “2023 has been so far a positive year for global iron ore trade. In Jan-Nov 2023, global loadings of iron ore increased by +5.4 percent y-o-y to 1,484.5 mln tones, from 1,408.5 in the same period of 2022, based on AXS Marine vessel tracking data. It is also just above the 1,451.7 mln tones loaded in Jan-Nov 2021, which was the last all-time record”. It is said “exports from Australia increased by +1.5 percent y-o-y in Jan-Nov 2023 to 836.8 mln tonnes, easily a new all-time record high. From Brazil, exports surged by +7.2 percent y-o-y in Jan-Nov 2023 to 326.5 mln t.
Ship recycling market already looking towards 2024
A Lack of activity was more than evident in the ship recycling market, over the past week. In its latest weekly report, shipbroker said that “it feels like there is a lack of ‘everything’ at the moment as there is little activity to report, few sales to report, the shores of the Indian sub-Continent starved of tonnage and few candidates being circulated for sale. As such, we cannot provide any tidings of joy for the recycling industry, and we look set to tiptoe into the New Year.
In 2024 container overcapacity expected to hit hard
The Container shipping market is expected to be hit hard by overcapacity from 2024 onwards. In its latest weekly report, shipbroker said that “Intermodal’s recent participation in the Busan International Port Conference marked a significant step in keeping abreast of the evolving dynamics of the global shipping and port industries. The conference, hosted in Busan, served as a critical forum for industry leaders to exchange insights on current developments and future trends”.
It is said that in the coming years, a notable imbalance between capacity growth and demand poses a significant challenge for the container shipping sector. With an expected excess in capacity over demand, stemming from a combination of larger year-on-year growth and weak demand since 2019, the industry faces potential overcapacity challenges.
What does cop28 mean for shipping?
Growing partnerships which drive shipping’s decarbonisation, an expanding role for the IMO, creating security for investments and striving for short-term improvements were the focus of shipping at this year’s COP climate summit.
But there is still much work to do. Adoption of future fuels remains in the early stages, with 98.8 percent of the fleet still sailing on fossil fuels, whilst 21 percent of vessels on order have the potential to operate on cleaner alternatives according to UNCTAD in their Review of Maritime Transport 2023.
2024 trade outlook “highly uncertain”
In a year marked by economic uncertainties, the latest Global Trade Update from the United Nations Conference on Trade and Development (UNCTAD) paints a picture of the dynamic and complex landscape that characterised global trade in 2023. With negative growth persisting since mid-2022, the world witnessed a significant contraction in goods trade, while services trade displayed unexpected resilience.
Goods trade is expected to bear the brunt of this contraction, shrinking by nearly $2 trillion or 8 percent, while services trade is poised to gain about $500 billion, representing a 7 percent increase. Despite the decline in the value of traded goods, the volume of international trade has shown a slightly positive trend, indicating resilient global demand for imported products.
The Decline in global trade in 2023 can be attributed to diminished demand in developed nations, underperformance in East Asian economies, and a decrease in commodity prices, said the report.
Tankers: 2023 turmoil, but a strong year nevertheless
The Tanker market has had a pretty strong year in 2023. In its latest weekly report, shipbroker said that “12 months ago, we titled our closing report of 2022 ‘What the hell just happened?’. 2023 has not seen the same degree of volatility but has still been a turbulent year for the oil and tanker markets, with robust earnings for all sectors owing to strong demand growth, tight supply and ongoing trading inefficiencies caused by geopolitical and climate related events”. “As the year started, China’s decision to lift it’s zero covid policy in late 2022 gave oil demand a significant shot in the arm, contributing 77 percent of this year’s 2.3mbd demand growth through an additional 1.78mbd of demand, with the VLCCs feeling much of the benefit. Following the December 2022 implementation of the crude price cap, February saw the introduction of the European and US embargo on Russian refined products and associated price cap.