in Hellenic Shipping News
04/04/2024
Shipping demand shifts could emerge from the U.S., West Africa and China in the coming months. The Baltimore bridge collapse is expected to disrupt coal and car carrier sea trade in the U.S. East coast area, bit also LNG export trade. In its latest weekly report, shipbroker Xclusiv said that “tragedy struck Baltimore earlier this week when the Francis Scott Key Bridge, a vital 1.6-mile long crossing over the Patapsco River, collapsed after being struck by the 9,962 TEU containership “Dali” (2015/HHI). Early reports suggest the ship may have lost power. The tragic incident caused the loss of more than 8 men but will also lead to significant disruption to the Port of Baltimore, one of the busiest ports of the East Coast, as officials work to clear the debris and determine the extent of the damage. Baltimore is the US’s 9th largest port by trade volumes with around ~50mt of international bilateral trade last year, 3% of total US trade and 0.4% of global volumes. Baltimore imported 15% of the total US car imports and exported more than 25.3 million tones of coal and approximately 5 million tones of LNG which are 30% and 5.6% of the US total exports respectively. Realizing the size and importance of the Port of Baltimore, the collapse will certainly affect the local economy and cause some logistic headaches, but is unlikely to trigger a major new U.S. supply chain crisis as competing East Coast ports are poised to handle more cargo and U.S. port infrastructures are more resilient after the Covid era”.
Source: Xclusiv
Meanwhile, in Africa and more specifically, in Nigeria, “the Dangote oil refinery, a colossal undertaking costing approximately USD 20 billion since its construction began in July 2017, commenced production in January 2024. This massive refinery boasts a capacity of 650,000 barrels per day, making it the largest in Africa upon reaching full capacity by the end of 2024. Nigeria, despite being one of the world’s leading oil producers, has historically relied on imports for nearly all its fuel needs due to a lack of domestic refining capacity. The Dangote refinery could be a game-changer in Nigeria’s quest for energy independence.
It has the potential to disrupt the roughly USD 17 billion annual gasoline trade route from Europe to Africa, putting additional pressure on European refineries already facing closure threats due to heightened competition. In 2023, roughly a third of Europe’s average gasoline exports (1.33 million barrels per day) went to West Africa, with Nigeria being the largest recipient. This potential drop in West African imports coincides with new environmental regulations in Northwest Europe. These regulations will force refineries to either adapt their operations, find new markets for lower-grade gasoline, or face closure”, Xclusiv said.
Source: Xclusiv
Finally, “despite an upside surprise in industrial production during the first months of 2024 and a gradual recovery following a 2023 slump, China’s economic and consumption growth prospects remain cautious. This cautiousness stems from limited government stimulus options, which constrain Beijing’s ability to boost investor confidence. A sustained manufacturing recovery could contribute to achieving the 2024 growth target. However, the lack of strong policy signals from the government has fuelled uncertainty surrounding China’s construction activity. This sector, a crucial consumer of steel, iron, crude oil, and oil products, remains a key wildcard in China’s demand outlook due to its embattled state. Renewed concerns about Chinese demand, coupled with ongoing geopolitical tensions, are weighing heavily on sentiment across commodity markets and the seaborne freight rate market”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
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