With rates across the dry bulk sectors improving in recent weeks, particularly on the Capesizes, we look at several inefficiencies across all sizes that may be providing support to freight markets.

 In the past month, the Baltic Dry Index has rebounded by 19.5% to 2,644. While numerous factors are at play driving this, several market inefficiencies have appeared in April. Similar to the effect Covid-restrictions had on rates in 2021, there are now other reasons that have emerged. Below we outline some of the factors that may be providing support to the market.

 Capesize shipyard activity

According to our tracking, Capesize vessels in shipyards has more than doubled from the previous month, currently standing at 9.8m dwt, primarily a result of longer visits at several Chinese yards. This accounts for 2.6% of the Capesize fleet, or  41 vessels, with the current average visit lying at 19 days. After reaching over 10.4m dwt in April, this was the highest level of yard activity for the Capesizes since April 2020 during the scrubber-fitting craze post-IMO 2020. While lockdowns in China continue across several provinces, namely Shanghai, efficiency in some shipyards has dropped, primarily caused by staff shortages.

Vessels regularly visit yards for maintenance and repairs, but also special surveys. Several vessels are likely to have requested an extension on carrying out surveys as a result of the high-rate environment the Capesizes found themselves in in Q3, hence the steep decline in yard activity over this period. As a result, typical Capesize capacity in yards is being compounded by the extra vessels that may have delayed their visit in 2H21. 2.6% of the Cape fleet is now effectively withdrawn from the fleet as of today. Although seemingly low, this can still provide meaningful support for freight for this sector in the short-term.

Further, some of this effect may be triggered by current bunker prices, which are certainly high enough to convince some players on scrubber-fitting. Finally, the elevated yard visits are rising higher as vessels prepare for the upcoming IMO 2023 regulation, fitting devices which may provide a more favorable EEXI or CII score from January onwards.

European discharge waiting times climbing

Shipments on bulk carriers arriving to discharge at Amsterdam, Rotterdam and Antwerp (ARA) ports totaled 24.1 MMT in April, rising by 43.8% YoY and the highest level in the past 5 years, the main driver of this trend has been the surge in coal imports into Europe. In April, 10.2 MMT of coal discharged in the ARA region, more than doubling YoY. This was largely a trade on the Capesizes in April, totaling 5 MMT, while coal discharging on Panamaxes increased by 52.9% YoY to 3.9 MMT. Other trades, iron ore and steels in particular, have also been strong into ARA driving the surge in bulker arrivals at these ports and lengthening waiting times. Bulk carrier waiting times at these ports in April averaged a day more than they did in March at 3.4 days. While the EU has banned the arrival of Russian-flagged vessels, this will have a limited effect on the dry bulk sector and thus will not have an effect on the queues in these ports.

Overall, dry bulk congestion of laden vessels in anchorages surrounding the ports in the ARA region has reached 2.4m dwt compared to a 5-year average of 452k dwt. When breaking waiting times down by cargo, we can see this effect is exacerbated for coal shipments, which accounted for 42.2% of ARA imports in April. Waiting times for these cargoes increased to 6 days last month, higher than for any other imported commodity. Following a sharp increase in coal imports, on-land supply chains have not adjusted in tandem, driving the delays. For context, Europe’s largest iron ore and coal terminal, EMO, has 14 barges scheduled for transport in the next 24 hours according to the company’s website, which will haul approximately 38k tonnes of iron ore/coal eastward. Rail and trucks are also facing drawbacks as a result of soaring fuel costs, as well as a reduction in available labour. Overall these constraints show the limited capacity to transport existing stockpiles in bulk quickly, hence discharging has to be delayed. While coal has certainly started to arrive into Europe from locations further afield than Russia, the above effect has only prolonged these voyages further.

Global waiting times

So far in 2022, average bulk carrier load waiting times have increased to new highs, rising above 4 days in February. Although having come down to 3.5 days in April, these still remain 19% higher than the 5-year average. Since the beginning of the Covid-19 crisis, we have seen a consistent rise in waiting times across all regions, particularly resulting from Covid-19 requirements over the first 18 months. However, since then, loading delays have persisted, as supply chains continue to be disrupted for other reasons.

On the back of heightened coal demand, ports in Eastern Australia have seen increased arrivals despite already operating at full capacity. Dry bulk congestion at the Port of Newcastle reached 5-year highs in mid-April of 2.8m dwt, also as a result of adverse weather affecting coal volumes reaching the port. In South Africa, wait times increased to over 8 days, the highest level since December 2019. Similar to Europe, rail and trucking constraints have limited raw materials reaching ports, a trend that is unlikely to subside any time soon. Finally, liftings out of West Coast India, which has started shipping more wheat due to soaring prices, has seen loading wait times climb to nearly 5 days as the port infrastructure is restricted for the volumes that are transported to the port by truck.

Overall, as on-land supply chain issues persist, vessels will continue to be forced to delay loading/discharging operations. With these vessels already in employment, it will ultimately make voyage lengths moderately longer across all vessel sizes. Another prospective event, owing to the ongoing lockdowns in China, is potential slippage in newbuilding activity as some yards in restricted provinces work under reduced labour conditions. As of today it is unclear whether this will ultimately take shape however it is something to keep in mind in the months to come.

The bulk carrier market is poised to benefit from a boost in grains exports from South America. Brazil and Argentina are expected to supply “ample” volumes into the market from July to September, with increases of 12 MMT for wheat, corn and soyabeans versus the same period last year, according to Danish grains consultancy BullPositions. For corn, the market can assume a slow increase in exports in May and June based on gradual availability from Argentina before the potentially abundant Brazilian Safrinha crop from July will boost loadings, it said. Although overall grain volumes are expected to fall by 3.5%-4% this year given the Ukraine conflict, tonne-miles will increase as trade patterns are redrawn, which will be supportive of freight rates going forward, according to Eagle Bulk, a US-based owner and operator of smaller-sized bulk carriers. The company noted several shipments from Brazil making their way to North Africa. Supramaxes and panamaxes, typically involved in grain movements, have maintained strength, closing on Tuesday at $30,210 per day and at $29,491, respectively, according to Baltic Exchange data. That represents respective gains of 15% and 21% from February 23, the day before Russia’s invasion of Ukraine.

According to the USDA, both Brazil and Argentina have provided “ample exportable supplies” of wheat as major importers scramble to find alternative sources amid the disruption to exports from the conflict in Ukraine. Brazil, which is traditionally a net importer of wheat, has taken advantage of strong global demand, tightening supplies, and elevated international prices to expand its exports, the USDA said in a report last month. Exports in the 2021/22 season were revised up by 800,000 tonnes in April to 2.5 MMT it said. That is almost triple the level of last year, with all months since December reaching record levels. Compared with previous years, Brazil has expanded its exports significantly to Saudi Arabia, Indonesia, Morocco, Pakistan, and Turkey, according to the USDA.

Argentina’s wheat exports were adjusted up by 500,000 tonnes to a record 15 MMT, it said. That is 56% higher than last year. Apart from Brazil, destinations include Indonesia, Algeria, Morocco, Chile, Kenya, and Nigeria. Meanwhile, the new crop of US wheat “holds some, yet limited, additional export potential” while Canadian wheat and barley will have “no material influence on export flows before the very end of August” due to later harvest cycles, BullPositions said.

Wheat, barley, and corn exports from the Black Sea are estimated to decline by 17 MMT, as war-torn Ukraine struggles to export volumes of new crop wheat and barley, which traditionally flow in July and August, while Russia may face subdued demand for its invasion of its neighbor, though some countries may find it irresistible to buy discounted Russian wheat to avoid food shortages. Luke Hutson, an analyst at New AG International, said that Ukraine was facing difficulties in farming given damage to infrastructure, curfews, and the lack of available workers. In addition, access to fertilizers was a challenge. An estimated 70% of the usual spring area, equating to some 14m ha, will be planted this year, he noted, citing the Ukrainian Agribusiness Club. The latest date to sow is May 20. However, one of the biggest obstacles is getting grain to export facilities, with little to no volume shipped from the three main agricultural ports in the Black Sea, Odessa, Mykolayiv and Mariupol. As a result, large stockpiles have been accumulated in the region of 15-20 MMT, he said. In a typical year, Ukraine would export about 6-7 MMT of grain and oilseeds per month, which means that even in normal circumstances, the current volume in storage would take several months to clear, Mr Hutson said, adding that talks are taking place to find alternative export routes using Baltic Sea ports. One option is the Lithuanian port of Klaipeda, which has lost volumes from Belarussian potash prior to the Russian invasion, due to sanctions on Belarus by the US in December. However, moving grain via rail from Ukraine to Poland to Lithuania would involve two changes due to different gauges — wide in Ukraine, narrower in Poland, and wide again in Lithuania, he said.

According to BullPositions, loading data for March showed a 500K-1 MMT increase in grain exports from Romania and Bulgaria, as compared to February. “This increase is most likely Ukrainian supply seeking alternative export ports and will continue in the coming months,” the Danish consultancy said.  However, based on inland logistical hurdles and port capacity, the total monthly exports from these two countries is unlikely to reach above 3-4 MMT, it said.

New York-listed Pangaea Logistics Solutions is continuing its run of profitable quarters with a first-quarter surplus more than three times what it earned a year ago. The niche-market bulker operator earned a net profit of $20.2m, dwarfing the $5.9m reported for the first three months of 2021. The surge extended to adjusted net income, which came in at $15.7m, or $0.35 per share. That compares to $3.8m, or $0.09 per share, in the same period a year ago. Revenue spiked to $191.8m from $125m in the first three months of 2021, a 53% increase that Pangaea attributed mainly to the increase in average time-charter equivalent rates. They jumped to $26,472 per day from $16,524.

“Improving dry bulk market fundamentals resulted in another strong quarter to start 2022 for Pangaea,” said chief executive Mark Filanowski, who has led Pangaea since predecessor and company founder Ed Coll died in December. “We were well-positioned entering the year after timely expansion of our fleet in 2021, and an early winter ice season seeing greater demand. We aim to extract as much value out of this market as possible and we remain opportunistic in our approach.”

The Newport, Rhode Island-based shipowner and operator prides itself on earnings premiums to the market as measured by the Baltic Exchange’s supramax and panamax indices. The company said its rates reflected a 17% upside to those benchmarks this time. Pangaea for the last three years led all public companies in such premiums as measured by Danish researchers Anders Liengaard’s and Soren Roschmann’s Vessels Performance Index.

The company is a leader in Arctic ice-class trades, hauls bauxite from Jamaica to the US Gulf and has also expanded into port and terminal operations. “With parts of our owned fleet dedicated to long term industrial contract business, our ships well balanced around the globe, and our chartered-in fleet on short term commitments, we feel we have never been in a stronger position as we turn our attention to our summer Arctic shipping ice season,” Filanowski said.

“We are also focused, more and more, on our ports and terminals businesses, especially in areas of tremendous growth. In Sabine, Texas, we are attracting new breakbulk business in green energy systems, and in Brayton Point, Massachusetts we are focusing on wind energy projects and contracts.”

There are few better signs of confidence in a market when a shipping company sells off one of its oldest ships to immediately replace it with one of its youngest. Low-profile Danish bulker company Janchart Shipping gave just such a sign, with founder Jan Joergensen confirming to TradeWinds two separate ship transactions that lower the average age of its fleet. Clients of the company agreed to sell the 28,500-dwt bulk carrier Meray Glyfada (built 2002) for about $10m to undisclosed buyers. At the same time, Janchart purchased the 34,100-dwt bulker Ionic Huntress (built 2012), a much younger and bigger ship, for between $19m and $19.5m. Broking sources put the price level for the Ionic Huntress at the upper limit of the range.

The vessel’s previous owner Ionic Shipping has probably picked a good time to sell the South Korean-built ship. The Ionic Huntress is scheduled to undergo a special survey soon. According to several brokers, Ionic Shipping sold sistership Ionic Halo as well two months ago at a lower price of between $18.5m and $19m. A deal for the Ionic Halo deal has not materialized. Its reported discount to the price achieved now by sistership Ionic Huntress, however, is characteristic of the continuing rude health of the bulker S&P market. “The secondhand market is providing plenty of distraction,” Athens-based Doric Shipbrokers said in their latest report. In several cases, vessels obtain “ambitious numbers and set benchmarks,” Doric added.

Price appreciation has exceeded the 10%-mark for some bulkers — especially smaller ones that continue earning in the spot market as much as bigger vessels like capesizes do, analysts at Allied Research said. Potential handysize buyers often get ahead of themselves and make offers that they ultimately cannot produce. In one such case, an unidentified owner pledged to spend $17m in an admiralty sale in Gibraltar last month for the 32,200-dwt Zeus IV (built 2009). According to a US-based broker, however, the transaction failed, and the next-highest bidder eventually got the pick at a much lower $15.8m.

Owners of previously distressed assets have found a good opportunity to divest vessels they have been holding on to for years. The 34,000-dwt tween decker sisterships Aramis and Portos (both built 2011) have reportedly found buyers at an undisclosed price with a time-charter attached. Whatever the value, it is certainly a multiple of the $6m each ship was worth in early 2016 when clients of Greece’s Interunity Corp picked up the pair.

Rising ship values appear even higher for Japanese owners who get more bang out for their dollar bucks when converting them to rapidly depreciating Japanese yen. Imabari-based Kifune Kaiun is said to have disposed of the 28,300-dwt Irongate (built 2015) to Far Eastern buyers for about $18m. The same ship had been reported sold in July last year for $13.9m. According to several broker reports, Singapore-based Swire Bulk offloaded a pair of Chinese-built handysizes as well — the 39,900-dwt Eredine (built 2014) for $24.5m to Canada-based buyers and the one-year younger Eriskay at an unidentified price to Europeans.

The dry bulk market is tipping towards owners as continuing healthy demand is set against slowing fleet supply, according to Precious Shipping. While tonne-mile demand is expected to grow by almost 2.1% this year, and 1.9% in 2023, supply growth is forecast at 2.2% and 0.4% over the respective periods, the Thai operator said in a newsletter. “With the inefficiencies in the net supply of ships due to Covid-19 related disruptions, this gap between supply-demand in 2022 and 2023 should widen in favor of the shipowners and we should see similar years as we had in 2021,” said chief executive Khalid Hashim.

Freight rates sky-rocketed in the past year as supply and demand was in perfect balance, with tonne-mile demand growth at 3.9% versus net supply growth of almost 3.6%, as estimated by Clarksons, he said.

Given the balanced supply-demand picture, rates will “react with extreme volatility with the slightest change in demand,” he said, adding that volatility was “here to stay”.

The dry bulk market was further tightened by lockdown-related congestion, deviations for crew changes, and delays due to ship quarantines. “We expect more fleet inefficiencies for 2022 as we do not see Covid-19 fading anytime soon, especially with China’s zero-Covid policy,” Mr Hashim said. “This factor will tighten net effective supply of ships, aided by the very low ordering activity in 2021. The fact that supply and demand have been in perfect balance since the middle of 2021, supply growth appears to be benign for the next few years, and growth in demand seems to be robust enough, that should lead to a reasonably good year in 2022.”

If net supply growth is affected by inefficiencies and slow speeds, then 2023 should also be a good year, given that world GDP growth is projected at 3.6% by the International Monetary Fund, he said. For the minor bulks, demand growth of 2.7% this year is met with net supply of 2.4% in the smaller geared segments in which the company operates. Higher levels of recycling are expected next year as new International Maritime Organization rules kick in. About 7.6% of the existing dry bulk fleet is more than 20 years old, which would make ideal scrapping candidates.

Chinese iron ore & coal imports so far into 2022 are down 7% and 16% YOY, respectively. According to Chinese customs authorities, iron ore imports for April came in at 86 MMT, down 13% YOY. Iron ore imports for April were also 2% lower than the 5-year average of 88 MMT. As a result, total iron ore imports in 2022 YTD came in at 354 MMT, down 7% YOY compared to 382 MMT in 2021. In our dry bulk sector report from July, we had modelled for Chinese iron imports to increase 4.8% in 2022, which compares to a decline of 7.3% so far in 2022 as China’s lockdown measures continue to affect import levels.
 
For April, Chinese coal imports saw an increase from March figures of 43% MOM and 8% YOY, respectively, to 24 MMT. For 2022 YTD, coal imports stand at 75 MMT, down 16% YOY and below YTD 5-year average of 101 MMT. Furthermore, the YTD coal imports decline of 16% compares with our modelled 3% growth for 2022.

The Baltic Dry Index (BDI) has soared to its highest level of the year as capesize bulkers continued to surge for a fourth day. The index, a broad-based measure of the strength in the dry bulk spot market, moved higher by 113 points on Monday to reach 2,831. The figure marked the highest level for the BDI since 14 December. While all of the bulker sectors that are components in the Baltic Exchange’s flagship index were on an upward march, capesizes posted the day’s largest gains. The Baltic Exchange’s Capesize 5TC, a measure of spot rates across five key routes in the sector, jumped 10% on Monday to reach more than $26,400 per day, which continued a rally that started on Wednesday and marked a level also not seen since mid-December.

The exchange’s route assessments showed the day’s spot market strength was broad-based but felt most acutely in the Atlantic market, where shipping a capesize cargo from the Brazilian iron ore port of Tuburao to China was worth $32.50 per tonne. That was an increase on the $30.43 per tonne price for the journey on Friday and marked the highest rate for the route since a market spike in October. The day’s jump on the trade translated to a $4,391 boost to time-charter equivalent rates for a roundtrip journey, with the Baltic Exchange assessing a round-trip voyage from China to Brazil and back at just over $26,600 per day. Fixture data from the Baltic Exchange shows rates for Brazilian iron ore movements may be pointing even higher than reflected in its market assessments, with charterers tied to deals at rates as high as $35 per tonne to carry iron ore to China. In one, Louis Dreyfus Commodities picked up an unnamed Classic Maritime capesize on Thursday to move 170,000 tonnes of the commodity from Tuburao to Qingdao, China, at $32.25 per tonne. In other late-emerging deals from last week, fixtures for Diana Shipping’s 182,000-dwt Florida (built 2022) and Oldendorff Carriers’ 179,000-dwt William Oldendorff (built 2017) fetched $33.70 per tonne for Sudeste-to-Qingdao runs.

Dealmaking on Monday was even higher. US industrial conglomerate Koch Industries is rumored to have jumped into the market to book Golden Ocean Group’s 181,000-dwt Golden Kaki (built 2014) at $35 per tonne for loading in late June, according to the Baltic Exchange. And trader Mercuria was linked to a fixture for the Golden Ocean’s 181,000-dwt Golden Houston (built 2014) at $34 per tonne for loading in the second half of June. Both fixtures involve moving iron ore from Tuburao to Qingdao.

While larger vessels dominated the day’s strength, panamaxes and kamsarmaxes also experienced upward momentum on Monday. The Baltic Panamax 5TC, which average spot rates for kamsarmax-size vessels on five benchmark routes, gained $512 on Monday to reach just under $29,100 per day. “A positive beginning to the week for the sector with both basins making gains. Brokers spoke of more enquiry in the US Gulf and North Coast South America which saw bids improve in recent days,” Baltic Exchange analysts said in their daily report. “Brokers spoke of more enquiry in the Pacific Region in general which helped levels from both the US West Coast and Australia improve.”

The giant containership orderbook, equivalent to the extant fleets of Cosco, Hapag-Lloyd, Evergreen, and Ocean Network Express (ONE) combined, is setting all manner of new records. According to brokers Braemar ACM, as of May 1 this year the capacity on order as a percentage of the fleet has breached 30%, with 7.5m teu of capacity now on order.

The teu capacity on order is the highest ever recorded, according to Braemar ACM, and combined with record LNG orders over the past year helps explain why dry bulk and tanker owners are struggling to source prompt delivery slots at Asian yards now. The last time that containership capacity on order represented 30% of the trading fleet was back in late 2011.

The 30% ratio is not an agreed upon figure with Clarksons, for instance, suggesting the number is 26.9%. Alphaliner, meanwhile, had a 26.2% number as of mid-April, albeit analysts at the BRS-controlled container unit admit around 30% is entirely possible, once they have confirmed several reported orders.

Net fleet growth, in terms of teu capacity for 2022 is estimated by Braemar ACM to be in the region of 4%. For the years 2023 and 2024, the annual average net fleet growth is currently showing 10% a year. For 2023, Braemar ACM now estimates a scheduled 2.5m teu of newbuilding deliveries are expected and the surge of deliveries accelerates in 2024. In 2024 more than 3m teu of fresh capacity is expected to be delivered according to Braemar ACM, the largest annual volume of newbuilding deliveries ever recorded. Clarksons puts the 2024 delivery figure at a massive 3.5m teu, larger than the entire existent fleet of CMA CGM.

Mediterranean Shipping Co (MSC), the world’s largest container line, with 1.33m teu on order, has the largest orderbook by some distance, equivalent to Maersk’s, CMA CGM’s and Cosco’s combined.

In Q4 2021 and Q1 2022 the share of “plain vanilla” fuel oil propulsion fell beneath 50% for the first time, recent analysis from Maritime Strategies International (MSI) shows. By far the greatest climber at fuel oil’s expense has been LNG dual-fuel ordering, with the share of methanol dual-fuel and methanol/ammonia ready orders remaining limited. “We expect incremental new orders will slow sharply after Q2 22, especially as downside demand risks continue to mount,” MSI stated in a recent report.

Australian coal exports peaked in 2019 at 396 MMT and since then have fallen back to 371 MMT in 2020 and 366 MMT in 2021 in part due to the reduction in energy demand due to Covid in 2020 but mainly due to the Chinese effectively stopping coal imports from Australia from October 2020. The change in trading patterns saw more Australian coal moving for instance into India (72 MMT in 2021 up nearly 20 MMT y-o-y) as China took a greater proportion of Indonesian coal. Today we are witnessing a further change in trading patterns as Indian buyers baulk at record prices for coal (Australian thermal coal prices traded last week at $371/ton (+$278/+401% y-o-y), with met coal prices traded north of $500/ton (+$391/+454%); whilst more European buyers are replacing some of this shortfall, since embargoes have started being placed by Europe, on Russian coal.

Some of Australia’s more traditional markets are also growing as coal remains the cheapest energy source; Japanese demand for Australian coal increased to 120 MMT last year(up 16 MMT y-o-y) and will no doubt further expand now that Japan has stopped importing coal from Russia. South Korea took increased imports from Australia to 61 MMT in 2021 (up 15 MMT y-o-y), whilst Taiwan imported an extra 6 MMT coal in 2021 to total 37 MMT. Other notable increases in exports from Australia were Indonesia (up 3.5 MMT to 9 MMT) and Thailand up 3 MMT to 7.5 MMT). Only Vietnam of Australia’s regular customers fell back by 5 MMT in 2021 to 16 MMT.

Despite reductions in volumes tonne-mile demand on dry cargo has benefited from these changes in trading patterns with both longer sea miles into India markets (plus increased port stays) and more latterly Europe. Due to economies of scale and more competitive freight, Capesizes and to a lesser extent Post Panamax’s are now carrying a greater share of Australian coal.

Shanghai officials have claimed, once again, that they are overcoming the worst of the covid crisis, six weeks after the China’s largest city went into lockdown. In Beijing, meanwhile, president Xi Jinping has vowed to continue with his zero-covid policy despite the deleterious effects it has had on the national economy this year. “Our prevention and control policies can withstand the test of history; our measures are scientific and effective. We have won the battle to defend Wuhan, we can also win the battle to defend Shanghai,” Xi said yesterday.

The Caixin purchasing managers’ index, a closely watched indicator for assessing the state of the economy, plummeted to 36.2 in April from 42 in March, according to a survey released on Thursday. A reading below 50 indicates contraction, while anything above that gauge shows expansion. The services sector accounts for more than half of the nation’s GDP and over 40% of its employment. The nearly six-point decline in services activity in April was second only to the collapse in February 2020, when China’s economy came to a near standstill as it battled to contain the initial coronavirus outbreak that started from Wuhan.

Looking at the numbers, Peter Sand, chief analyst at container shipping platform Xeneta, told Splash: “This confirms what we already know even if real data on this is hard to get by. China manufacturing is hit hard by the rolling covid lockdown in main hubs, be it Shenzhen or more recently and significantly Shanghai.” Trying to put a dollar figure to the trade hit from the ongoing Shanghai lockdown, UK risk modelling company Russell Group estimated yesterday the closure of the giant city had cost global trade $28bn so far. Nationwide, about 327.9m people in more than 40 cities are affected by the latest lockdowns, Nomura’s chief China economist Ting Lu estimated Wednesday. That’s about 31% of China’s GDP, down slightly from last week’s 35.1% share, he said.

The Asian Games, due to take place in Hangzhou near Shanghai, were postponed today, the latest victim of Beijing’s zero-covid drive. Shanghai authorities said today they have brought China’s worst outbreak of covid under effective control. The number of new covid infections in China’s financial hub had been on a “continuous downward trend” since April 22, the city’s vice major Wu Qing said. However, for many of the city’s 25m citizens still under lockdown, Wu warned a lifting of confinement measures was unlikely very soon. “We cannot relax, we cannot slack off: persistence is victory,” he said.

The number of new covid cases in Shanghai and across the country has fallen in the last few days, while Shanghai authorities have added more businesses to a whitelist for resuming production. A measure of road freight — reflecting how easily goods and parts can move around the country — has improved as well, albeit still far below normal levels. After a full opening up of Shanghai it will take at least four weeks for operations at the city’s port, which boasts the world’s highest container throughput, to get back to normal, analysts have repeatedly warned during this latest lockdown impasse. A noticeable box shift has been seen in Ningbo-Zhoushan to the south of Shanghai, which registered a throughput more than 3m teu last month, up by more than 10%, and setting a new monthly record.

Splash reported earlier this week on the effects lockdowns were having to both Chinese and international ship repair yards. Braemar ACM data has added some extra detail, pointing out that in the capesize sector, vessels in shipyards have more than doubled from the previous month, currently standing at 9.8m dwt, primarily a result of longer visits at several Chinese yards. Multiple other data points depict the broad impact from covid restrictions in China with clear implications for various shipping segments. Power generation, for instance, rose in the first two months of the year, but slowed to zero growth in March, according to figures cited by Larry Hu, chief China economist at Macquarie. He said this week he expects a drop in power generation in April. In the real estate sector, Hu noted that lockdowns also make it “physically impossible to buy property,” sending sales in the top 30 cities down 54% in April from a year ago.

Many in dry bulk are pinning their hopes on a big stimulus package from Beijing, something president Xi has hinted at in recent days. It cannot come soon enough with so many indicators pointing to a slowing economy. For instance, the number of heavy trucks sold in April was down 77% year-on-year to 45,000, the lowest point since 2007. On the consumer front, companies like Starbucks are reporting a widespread impact from Covid. In the quarter ended April 3, the coffee giant said 72% of the 225 Chinese cities it operates in experienced omicron outbreaks. The company has more than 5,600 stores spread across eastern and central China, its second-largest market. Starbucks said as of Tuesday, a third of its stores remain temporarily closed, or only offer delivery or takeout.