America’s choice of president is so important, the old European witticism runs, that everyone in the world ought to get a vote. But that isn’t how these things work, and the only Lloyd’s List readers able to have their say last week were those who are US citizens. The verdict of the electorate, at least, was unambiguous. Some 74m people opted for the Democrats’ Joe Biden, with only 70m favouring a second term for Republican incumbent Donald Trump.

The choice between the candidates’ wider political agendas is a matter of individual conscience, of course, and given the outcome confirmed at the weekend, liberals will already be in celebration mode. But if we narrow the focus down to a business perspective, or even shipping-specific concerns, there are no obvious reasons for conservatives to fear a President Biden administration.

The rap sheet against Trump is voluminous, not least on account of his overt bonhomie towards elements in US society that should be encouraged to limit use of white bedsheets to the bedroom. But his enactment of tax cuts and deregulation did allow many businesses, especially small businesses, to flourish. Stimulus spending on a grand scale ripped up prevalent economic orthodoxy, but sustained growth in personal consumption to a degree that has redounded to the benefit of container trades.

You decide whether Trump succeeded in his declared aim to Make America Great Again, but he Made America a Net Oil Exporter Again for the first time since the 1940s, no uncertain boon for tanker owners. Even his commitment to the Jones Act was proven to be as unimpeachable as he himself turned out to be. But there were gargantuan lacunae too, not least Trump’s persistent conceptualisation of trade as a zero-sum game.

Biden has the better understanding of free markets and free trade, both of which work best when there is confidence that democracy will unfold the way the textbooks say it should. His more pragmatic approach to foreign policy will be welcomed by an industry in which owners, with the obvious exception of the maverick few, value predictability.

US sanctions are frequently extraterritorial in remit, adding bite to the joke with which we opened. Such heavy-handedness is perceived by the rest of the planet as unjust. The real prospect of resumed talks with Tehran and Caracas will be positive news for shipowners who wish to trade legitimately with those nations, not to mention the P&I clubs and other marine insurers that are currently forbidden from covering vessels calling in Iran.

A reduction in posturing in negotiations with China will also be welcomed by those in the industry who have had to live with the consequences of Trump’s flirtation with protectionism, which have been sufficiently extensive to make a communist government appear the better advocate of Adam Smith.

Even a more coherent approach to coronavirus, making good Trump’s most visible single failing, will boost prospects of a rapid resumption of economic normality. While Biden may not offer a panacea for all that ails shipping, or even any to have particular interest in our fate, he should be shipping-friendly.

China is expected to block imports of Australian coal, copper ore, barley, timber and sugar even if the goods have been paid for and have arrived at ports. Although no formal notifications have been issued by the Chinese authorities, an imminent ban has been reported on government-owned media, and in verbal instructions reportedly issued to Chinese state-owned and private traders.

Amid the confusion, Chinese end-users were said to be reselling the cargoes that had not yet arrived at ports and cutting further purchases in case cargoes are prevented from clearing customs. Many of these shipments are being diverted to India or Vietnam, according to Braemar ACM, while dozen others continue to wait outside Chinese ports. They include 24 capesize, post-panamax and panamax bulk carriers at anchor in Bohai Bay laden with Australian metallurgical coal that has been delayed since arriving more than 12 weeks’ ago, Lloyd’s List research shows. The excessive queues and waiting times have most affected post-panamaxes given they are heavily used in the Australia — China trade, according to the shipbroker noted.

Australia ships some 55% of its 170m tonne metallurgical coal exports to China, in trade worth some $23bn according to government forecasters. The trade, alongside shipment of steam coal used for power generation, is a major employer of bulk carriers in the Pacific basin. The biggest cargo route — iron ore exports to China from Australia are said to be unaffected because alternative sources of the steelmaking ingredient are more difficult to procure.

Shipbrokers have told Lloyd’s List that there are still some vessels on their way to China or that some have fixed since news of the ban first emerged. “It’s an ultimate nightmare scenario,” said a Singapore-based broker, “as we are unsure what happens to our ships waiting to discharge Australian cargoes at Chinese ports.” Other than the plethora of claims that could arise out of disputes between charterers and end users, prolonged storage of this cargo on the ship increases the risk of exposure for the crew. Coal cargoes are well known to be susceptible to self-heating, said Standard P&I club’s senior surveyor Akshat Arora. The self-heating process causes oxygen depletion and emission of carbon monoxide gas, which is a toxic, odourless and colourless gas. Some types of coal may also emit methane, which is a flammable gas.

Trade tensions between Australia and China have been rising for several months, after Canberra backed calls for an international investigation into the spread of the coronavirus pandemic from China. Despite the verbal ban, Braemar saw discharges of Australian coal in China jump by 21% month on month in October to 6.4m tonnes although it is unclear how much of this had been waiting to clear for an extended period. But Australian coal shipments are still likely to remain depressed, Braemar conceded, and the availability of substitutes from other sources is already reshaping coal trade flows. “While Australian cargoes are being resold into different markets, Chinese buyers are looking to other suppliers for high-spec coal.” Most of this increased volume has come from ports on Russia’s east coast, such as Vostochny and Shakhtersk on panamaxes and supramaxes.

If restrictions on Australian coal continue into next year, China will have to scramble for other sources to satisfy its appetite for coal given the limitations on Russia’s production capabilities. This could translate to more long-haul trade from Canada and the US. But because of the lack of cost-effective alternatives, analysts believe that there will be an increase in the flow of overland coal volumes into China from Mongolia hurting the demand for bulk carriers. Panamax average time charter rates were assessed at $10,800 daily by the London-based Baltic Exchange, the lowest since mid-June.

Customs agents are also suspending imports worth a further $6 billion of Australian timber, copper ore and concentrate, sugar, wine and barley according to Chinese media reports.  There has been no confirmation of the ban at ministerial level, Australian government officials said. China is Australia’s largest trading partner, but diplomatic relations have soured in 2020, over a host of political disagreements. The Australian government has criticised the Communist’s party intelligence networks and surveillance within Australia and banned technology company Huawei.

China’s appetite for imported commodities has been one of the bright spots for shipping during the pandemic, when demand in other economies has waned due to lockdown and travel restrictions. The Asian country is not only expected to claim a larger share of the global economy in 2020 but is also actively expanding its global influence in trade and other affairs.

The International Monetary Fund revised its forecasts for gross domestic product in its latest October World Economic Outlook report, predicting the impact of the pandemic will be less severe on the world economy than in the June update as second-quarter GDP outturns were not as negative as previously feared. China returned to growth and the sizable fiscal, monetary and regulatory responses from governments maintained disposable incomes, protected cash flow for companies and supported credit provision. Chinese GDP grew by 4.9% in the third quarter from a year earlier, according to official statistics. This is in stark contrast to developments in many other countries, though.

IMF managing director Kristalina Georgieva warned that low- and middle-income countries could send global debt levels above 100% of global GDP next year; a development that could take decades to reverse. According to the IMF, the period ahead will require balanced domestic policies that manage the trade-off between lifting near-term activity and addressing medium-term challenges. It recommends that policy makers simultaneously aim to mitigate climate change at the same time as bolstering the recovery from the pandemic. Inflation has also dropped markedly this year in most economies bar China and the IMF expects full-year inflation to remain low compared to previous years. However, inflation has been on a declining path since 2018 in many countries, again with China as an exception. Most commodity prices took a fall in the first half of this year, but as economies have started to recover, prices have followed suit.

China has initiated a huge stimulus package that focuses on bolstering domestic infrastructure and this has seen purchases of key commodities rise. After taking advantage of low prices for crude oil earlier in the year, it has not let up and the country imported a record volume from the US in September, reflected in increased tonne-mile demand for tankers from Gulf ports. It was also revealed recently that Eastern Pacific, the Singapore-based shipmanagement company, will build and operate four 98,000 cu m very large ethane carriers for a Chinese petrochemical company that is about to start shipping regular cargoes of the refrigerated gas from the US Gulf. The 15-year deal with Zhejiang Satellite Petrochemical underscores China’s rising dominance in US ethane export trades.

Analysts are also increasingly confident about prospects for the dry bulk market as China’s appetite for raw material rise. China is in the process of its multi-facet “rebalancing,” from export- and investment-led growth to more consumption-driven growth, and is expected to have “a smooth handover” from publicly generated growth to private demand-driven growth beyond the near term, according to the IMF. China’s growth is having a positive spillover effect on commodity prices, in turn providing encouragement to dry bulk freight rates. The country’s iron ore production has been in decline since 2018 and shipping has benefited from that. In a normal year, more than 70% of iron ore shipments are destined for China but large ore carrier arrivals in China from Australia and Brazil, the main exporters, are up almost 2% for the year to date compared with 2019.

China is also a leading importer of coal, which is used for power generation and steel production. The majority of coal imports are sourced from Indonesia and Australia. Here we see a shift, though, since coal ship arrivals in China from Australia are up compared to last year, but they are down from Indonesia. The concern here, however, is the rising political tension between China and its Antipodean neighbour, with the souring relations resulting in a ban on coal imports from Australia with the potential for other products to follow suit.

Looking at global steel production, we see that total volumes are still below last year, but China has the highest monthly production on record with 96m tonnes in August and the year-to-date volume is 4% above 2019. This has led to a plateauing of the country’s iron ore imports recently but that could be short-lived as China has mandated greater use of scrap steel and stricter pollution controls in its next five-year economic plan. China has been a heavy buyer of soyabeans this year to boost domestic reserves. In the first seven weeks of the US marketing year, soyabean exports to China amounted to 8.2m tonnes, according to BIMCO. That represents 72% of all US soyabean exports over the period.

As for exports, container freight rates on the Shanghai Containerised Freight Index have been at near-record highs due to the strong bounce back in consumer demand from the US and Europe following pandemic-led lockdowns there. This is likely as a result of those economies prioritising the protection of personal income via furlough schemes and other measures, as opposed to China’s infrastructure-led spending. However, with new lockdowns in Europe and uncertainty in the U.S. over its Covid-19 response in the wake of the election, some analysts have warned that there is no guarantee the current level of demand will be maintained beyond the short term, should consumer behaviour change.

At the time of publication, there was no clear winner in the US presidential election but whoever is eventually elected, it is unlikely that either Donald Trump or Joe Biden will lift the recent high tariffs imposed on certain Chinese goods, or oversee a dramatic cooling of the trade tensions between the two countries. Meanwhile, China continues to expand its political influence on world affairs and is stepping up its importance in the developing world. It has joined the World Health Organisation’s coronavirus programme, Covax, which aims to help poor and middle-income countries gain access to a coronavirus vaccine when available. This could be seen as a response to the US withdrawing its funding from the WHO.

The long-term Belt and Road Initiative also continues to increase China’s connectivity not only with its neighbouring countries, but also all the way to Europe via both land and sea.

This week’s frenzied and chaotic race for the White House has done little to soothe the nerves of the shipping industry. The Covid-19 pandemic, collapsed oil prices, depressed trade growth and the climate emergency will all be tackled differently depending on the results of the titanic struggle between Republican incumbent Donald Trump and Democratic challenger Joe Biden for the US presidency. The expected clean-cut victory for one side did not happen and the American people remain distinctly divided. The House of Representatives and Senate were similarly spliced in two, with the Democrats and Republicans respectively expected to retain majorities. This will make any president’s job difficult.

The fact that Trump declared an early victory before the full results were in and indicated he might not accept the result of the election served to increase the tension. But does this political pantomime really mean much for the maritime world? The biggest problem is that Trump does not agree with an international rules-based system, hence his disdain for the Paris Agreement on climate change and the World Health Organization. Would the already troubled IMO be next on his list for institutions to be thrown overboard?

Shipping intelligence services such as VesselsValue told its customers to “forget morals, politics or personal opinion” and concentrate on trade data to view which US politician would be best for shipping markets. “Tankers for Trump” — meaning this shipping sector would benefit from his ongoing presidency on the back of Iran sanctions, blacklisting of certain tanker fleets and support for US crude exports. This is right, of course. Volatility is a wonderful thing for some tanker owners short term, but constant upheaval is not the best way to run a global economy. VesselsValue believed it should be “Bulkers for Biden” and “Boxships for Biden” because Trump’s protectionist policies and trade war with China have been bad for these sectors. So it is a shipping score draw and, anyway, could we be sure Biden will heal the rift with his country’s superpower rival in Beijing?

To my mind, Trump is a dangerous maverick with inflammatory rhetoric and a record of unpredictable behaviour. But the election results so far this week show his nationalist populism strikes a chord with a big part of the American electorate. So the polarised views of the US population are not going to disappear — whoever is president — as are the Covid crisis and climate change. Both of these stand to be tackled quite differently by Trump or Biden. The bad news on the former, of course, is that a second wave of the pandemic is sweeping Europe and triggering new lockdowns. This dented global equities last week, with shipping stocks particularly hard hit — many down by 10%. Oil prices and VLCC tanker hire rates were also depressed. The Baltic Dry Index had been recovering in recent weeks, but this week slumped to 1,263 — down nearly a quarter on the year.

There are hopes that big tanker fortunes can be revived by the increasing “contango” of current oil prices being lower than future ones. This offers the kind of storage opportunities that led to the tanker boom in May and June. On the day of the election, there was a Wall Street rally built around opinion polls showing Biden as the favourite. There was also positive news coming out of China, with the Caixin/Markit Manufacturing Purchasing Managers Index coming in at 53.6%. This measure of business confidence has grown for six consecutive months and is now at its highest level for 10 years.

China is the only major economy predicted by the International Monetary Fund to grow — in this case by just over 2% — during 2020. Meanwhile, Europe, having bounced back in the third quarter to expand by 12.7%, is now expected to contract by 2.3% in the final three months of the year. The China comeback has been good for boxships, with the Shanghai Containerized Freight Index up by a further 4% last week. Clarksons Platou Securities believes that prevailing rates for panamax boxships are at their highest levels since July 2011. Shipping, like most business sectors, needs stability for longer-term success. Let’s hope a new — or incumbent — US president can provide it.

China will import over $22 trillion worth of goods over the next decade, and the country is accelerating its opening up in spite of the global coronavirus pandemic, Chinese President Xi Jinping said on Wednesday. Speaking via video message at the opening of the Nov. 5-10 China International Import Expo, or CIIE, an annual import show in Shanghai, he said the world should not let unilateralism and protectionism undermine the international order.

“We should take a constructive stance to reform the global economic governance system and promote an open world economy,” he said via video message. “With a population of 1.4 billion and a middle-income group exceeding 400 million, China is the world’s largest market with the greatest potential. China is expected to import an accumulated over $22 trillion worth of goods in the next 10 years.”

China is set to be the only major economy to grow this year after largely bringing the epidemic under control, following its emergence in the central city of Wuhan last year. It opted to push ahead with its annual import fair this year, a rare in-person trade event held during the pandemic, albeit with stringent capacity limits and health restrictions. CIIE was first held in 2018 when a trade war between China and the United States was heating up. Analysts said the fair was a signal that the country is open for business, though few, if any, foreign business and political leaders are expected to attend in person, due in part to Covid-19.

Serbian President Aleksandar Vucic and Tedros Adhanom Ghebreyesus, director-general of the World Health Organization, were among other speakers who delivered video messages at the opening ceremony. Though the exhibition is focused on buying foreign goods, critics say it does little to address structural issues with China’s export-dominant trade practices, such as weak intellectual property protection and the lack of a level playing field for foreign businesses in China.

Xi said China would reduce its catalog of restricted goods and technology imports, treat all companies registered in China equally and sign more high quality trade agreements with other countries. His $22 trillion pledge compares with a target he announced in 2018, when he said he expects China to import $30 trillion worth of goods and $10 trillion worth of services in the next 15 years.

He did not give a goal at last year’s fair, which took place before the emergence of the coronavirus, but assistant commerce minister Ren Hongbin said that year that China was confident of fulfilling its 2018 CIIE pledges. China’s 2019 imports of goods fell 2.8% to $2.08 trillion as economic growth slowed to near 30-year lows. That compares with a 15.8% surge in imports in 2018 to $2.14 trillion.

Xi did not in his speech directly address China’s increasingly difficult relationship with the United States, especially with President Donald Trump, who has launched a raft of sanctions against Beijing, nor the country’s presidential elections. The US presidential election, in which Trump is running against Democratic rival Joe Biden, hung in the balance on Wednesday and has so far proved far closer than polls had predicted. However, Xi said that countries should not “throw punches” at each other.

Shipping must demonstrate consistent profitability before the big institutional cash flows in – but there is hope for bulkers in the coming years. That is the view of Joakim Hannisdahl, head of research at Norwegian investment bank Cleaves Securities. Asked on the company’s quarterly shipping webinar if he could see signs of institutional investor interest picking up, the analyst said: “I can’t say I do unfortunately. We are operating in a segment that is really small, looking at the total universe of equity and bonds.”

When tanker rates were booming earlier this year, Hannisdahl said he got a lot of calls from investors not familiar with shipping, asking if they should buy tanker company shares. They wanted to know if they would be the “last to the party” or whether there was still some upside, he added.

With rates for bulkers now rising, Hannisdahl said the sector is hoping that at some point “the generalist money will open their eyes.” He explained it only takes a small portion of the big institutions’ capital to expand the market cap of the shipping sector. But he said: “General investors are so fatigued after 10 years in shipping without any earnings. Big names we speak to are telling me, ‘I can’t take this to an investment committee because the last time someone invested in dry bulk in 2014, that guy is not here anymore and the committee will not even hear about it’.”

Hannisdahl believes shipping needs to be seen to give a consistent return to equity holders by earning above cash breakeven for a duration. “So potentially at least in dry bulk we could show that in 2021 and 2022. I can then see a capital influx from 2022 and 2023, and then it is really elastic and moves fast,” he added.

Asked what the key risks to the bullish dry bulk sector, the analyst said the Chinese “ban” on Australian coal is a big one. But he said that as long as there remains an all-time record low orderbook, the bulker sector can resist “black swan” events like the Vale dam collapse and the coronavirus pandemic.

Cleaves is rated number one shipping investment bank by Bloomberg, which said in 2019 the average return across its covered companies was 45%. And Cleaves may be about to capitalise on this status. Hannisdahl was asked why Cleaves does not start an exchange-traded fund or investment fund so investors can follow the bank’s strategy and buy into it. The analyst responded: “We have had a lot of thoughts. We are always happy when people are making money based on our recommendations. “I can’t say too much, but we are thinking those thoughts. If and when we have news we will make sure everyone is informed.

Turning to the imminent US presidential election, Hannisdahl said the best result for shipping markets would be a clear victory one way or the other, so there is “no ambiguity” about who is going to lead the country.

Slowing dry bulk supply growth combined with a new China stimulus package are set to provide added impetus to vessel earnings, says a top shipbroker. The orderbook is “substantially smaller today” when compared to the beginning of the previous stimulus cycles in China, says Arrow Shipbroking. “The orderbook was 80% of the fleet in November 2008 when the Chinese government introduced its stimulus package to counter the effects of the global financial crisis,” it said.

“There were two other notable downturns over the last decade; one in 2011-12 and another in 2014-15. China’s response to those were the same; a stimulus was introduced in July 2012 and another in November 2015. At the time, the [dry bulk] orderbook was 26% and 12% of the fleet, respectively. Today, we are at the beginning of another stimulus cycle and the orderbook-to-fleet ratio is only 6.9%.”

Arrow said the number dry bulk newbuilding orders placed so far this year is the second lowest number of ships on record and is well below the average contracting per year over the last two decades. Lack of or expensive newbuilding financing, as well as regulatory and technological uncertainties have…put a cap on contracting activity. “With only 5.5% of the fleet on order, the supramax orderbook is at its lowest on record. The panamax orderbook stands at 6.4% of the current fleet, the smallest in two decades.”

Capesize newbuilding orders number just 10 for the year-to-date against an annual average over the past decade of over 90 ships per year. In the panamax/kamsarmax segment just 22 orders have been placed so far this year against the annual average between 2010 and 2019 of 155 ships.

In the smaller segments, orders for handysize and supramax/ultramaxes number just 20 and 64, according to Arrow figures, against annual averages of 208 and 155, respectively. Unlike the previous cycles, Arrow says improving vessel earnings are not expected to trigger another round of aggressive ordering. “Lack of or expensive newbuilding financing, as well as regulatory and technological uncertainties have been, and will continue to put a cap on future contracting activity,” it said. Arrow expects limited fleet growth over the next 18-24 months as a result.

The shipbroker adds that even if ordering picks up in the coming quarters, which it does not anticipate, it would not have any significant impact on fleet growth over the next 12-18 months as the earliest available delivery berths are currently in the first and second quarter of 2022.

Arrow said it expects dry bulk seaborne trade to shrink for the first time since 2009, but the drop in volumes are likely to be “smaller than previously expected”. However, the shipbroker said shipments are set to “rebound strongly” in 2021 as demand outside of China catches up.

Shipping must demonstrate consistent profitability before the big institutional cash flows in – but there is hope for bulkers in the coming years. That is the view of Joakim Hannisdahl, head of research at Norwegian investment bank Cleaves Securities. Asked on the company’s quarterly shipping webinar if he could see signs of institutional investor interest picking up, the analyst said: “I can’t say I do unfortunately. We are operating in a segment that is really small, looking at the total universe of equity and bonds.”

When tanker rates were booming earlier this year, Hannisdahl said he got a lot of calls from investors not familiar with shipping, asking if they should buy tanker company shares. They wanted to know if they would be the “last to the party” or whether there was still some upside, he added.

With rates for bulkers now rising, Hannisdahl said the sector is hoping that at some point “the generalist money will open their eyes.” He explained it only takes a small portion of the big institutions’ capital to expand the market cap of the shipping sector. But he said: “General investors are so fatigued after 10 years in shipping without any earnings. Big names we speak to are telling me, ‘I can’t take this to an investment committee because the last time someone invested in dry bulk in 2014, that guy is not here anymore and the committee will not even hear about it’.”

Hannisdahl believes shipping needs to be seen to give a consistent return to equity holders by earning above cash breakeven for a duration. “So potentially at least in dry bulk we could show that in 2021 and 2022. I can then see a capital influx from 2022 and 2023, and then it is really elastic and moves fast,” he added.

Asked what the key risks to the bullish dry bulk sector, the analyst said the Chinese “ban” on Australian coal is a big one. But he said that as long as there remains an all-time record low orderbook, the bulker sector can resist “black swan” events like the Vale dam collapse and the coronavirus pandemic.

Cleaves is rated number one shipping investment bank by Bloomberg, which said in 2019 the average return across its covered companies was 45%. And Cleaves may be about to capitalise on this status. Hannisdahl was asked why Cleaves does not start an exchange-traded fund or investment fund so investors can follow the bank’s strategy and buy into it. The analyst responded: “We have had a lot of thoughts. We are always happy when people are making money based on our recommendations. “I can’t say too much, but we are thinking those thoughts. If and when we have news we will make sure everyone is informed.

Turning to the imminent US presidential election, Hannisdahl said the best result for shipping markets would be a clear victory one way or the other, so there is “no ambiguity” about who is going to lead the country.

The trend is your friend is a phrase often said when you have no clue whatsoever about where the market is heading. You can clearly see that something is not rational, something is not business as usual, but you cannot nail it down. Some of that is likely to be new market dynamics brought around by an unprecedented distortion of demand. After a dreadful first half, the tables have turned. China’s stocking up of almost every single dry bulk commodity, but coal, meant that normal short-hauls of wheat out of Black Sea became long-hauls into China.

China has more than doubled its imports from the Black Sea region – all of which goes via the Suez Canal, that has seen bulker transits jump by 26% for the first three quarters as compared to last year. Mainly panamax, post-panamax and capesize transits, which have increased by a jaw-dropping 46% year-on-year. The increased long-haul voyages have boosted the dry bulk market by almost 160bn tonne miles as Egypt, the Netherlands and other nearby importers saw declining volumes.

As the winter season now looms – your focus should be three-fold: 1) will Chinese economic stimulus continue to boost long-haul demand as they stock up on almost every single commodity? 2) can Vale finally get its act together? 3) how much will Chinese coal imports fall?

In the case of China being unable to uphold the hectic pace of imports – it will be a disaster for the market. Only grains for animal feed have been able to keep flowing into normal destinations. China tends to surprise on the upside – with 2016 being the only exemption on record. You may even forget about the trade spat with Australia – as that is short-hauls only. Having said that, it has been saber-rattling only up until August.

While speaking of saber-rattling, Vale’s fairly new CEO, Eduardo Bartolomeo is ‘boasting’ about the company being able to produce iron ore volumes that will exceed those of 2018, by the end of 2022 or early 2023. At least he is buying himself a bit of time, while reflecting on Vale’s poor production guidance and execution over past years.

Meanwhile, the Chinese investors behind large scale investments in Guinea Bissau waste no time, as they head for up to 80 MMT by 2025 from the Simandou iron ore site. This is a move to diversify its suppliers as well as a response to many years of lacking iron ore from Brazil as the only real alternative to Australia.

As Splash Extra forecasted last month, China’s coal imports in September fell year-on-year bringing total nine months coal imports below that of 2019. It was the fifth consecutive monthly decline, coming in because more regions have exhausted their import quotas for 2020. Being down by 4.4% on the same nine-month period last year already, we can start adding the escalating tensions with Australia into the mix. These tensions now bear consequences for ships with a coal cargo currently waiting to discharge in China as they are harassed by local authorities with Beijing sanctioning any such actions.

It is gloves off for China in many ways these days.

The Covid-19 pandemic impact on shipping markets has created a “compelling” case to invest in secondhand dry bulk tonnage, John Michael Radziwill said. The C Transport Maritime and GoodBulk chief executive’s comments came as speakers at the TradeWinds Digital Forum discussed business fortunes in the pandemic-hit shipping markets. “I am not going to order a new ship and oversupply the market,” he said. “But the secondhand market is very compelling going forward.”

Radziwill pointed out the newbuilding orderbook has fallen to around 8% of the dry bulk trading fleet, which he said is usually taken as a good sign to buy secondhand tonnage. The spread between newbuilding prices and low asset values of trading ships is another positive factor pointing toward the secondhand market, he said. There is also little chance of a rush of newbuilding investment in the sector because there is so much uncertainty over environmental regulation. “Now you’ll see more restraint than in the normal circumstances because we don’t know what the ship of the future will be,” he explained. There are positive indications in the trading markets too. “The soft commodity movements are growing and growing particularly in agritrade because countries want to secure their food supplies,” he said.

MF Shipping Group chief executive Karin Orsel said that her company had seen demand sustained in the its key markets. “The chemical and product tanker trade has always been good, and it’s still a good market, we have not seen a drop in demand,” she said. Similarly, construction work in Europe has sustained demand for cement carriers. Her company has recently taken delivery of two general cargoship newbuildings. She said that the demand for conventional vessels will remain despite the move toward low-emission vessels. “The big question today is if we had to make the decision again would we order the same vessels? I think we would order them because there is a shortage,” she said. “Today we operate vessels for 20 to 25 years but I don’t think it will be the same in the future.”

The Kaptanoglu Group’s Sadan Kaptanoglu said that environmental regulation would create work for her company’s shipyards. “Shipyards can build whatever you ask. But what shipyards need is the same as shipowners. We need solutions and those solutions are not going to be one but multiple,” she said.

Columbia Shipmanagement chief executive Mark O’Neil also said that he had seen an increase in all types of shipowners seeking cooperation since the onset of the pandemic. He said that the crisis had shown that larger shipmanagement operations are able to cope better with the problems thrown up by the pandemic. “What we have seen in the last six or seven months is an increase in large, medium and small operators coming to us for collaboration and assistance,” he said. “The whole Covid-19 situation has shown that size does matter and, be it crew change or whatever, the problem will be magnified for the smaller operator.”

He said there had been a growth in what he described second-party management involving much closer engagement between owners and shipmanagers. “The industry is maturing and there is a greater willingness to work with managers,” he said.