FreightWaves Ocean

Can shipping shares catch wave of (ir)rational exuberance?

Wall Street

To the growing bewilderment of skeptics, equities continue their rally, trading as if the recovery is nigh, there will be no second-wave lockdowns, and government largesse will offset unemployment.  

The S&P 500 closed at 3,232on Monday, up 44% from its March 23 low and down less than 1% year-to-date (YTD), effectively erasing its losses for the year.

“The broader equity market is beginning to buy into the idea of a rapid recovery to the extent which just two months ago I would never have...

https://www.freightwaves.com/news/can-shipping-shares-catch-wave-of-ir-rational-exuberance

Q&A: Inside the early warning system of global trade

container ships

There have been pandemics before, but never at a time when the global economy was this interconnected. There have been global recessions before, but never one driven by the mix of forces seen in 2020.

With all the uncertainty, there’s an intense hunger for leading indicators, and ocean shipping — particularly container shipping — has offered an early warning system ever since the coronavirus crisis began in late January.

Container lines “blank” (cancel) sailings well ahead of scheduled departures...

https://s29755.pcdn.co/news/qa-inside-the-early-warning-system-of-global-trade

US sanctions target Greek tankers loaded with Venezuelan crude

crude tanker

U.S. sanctions had a huge impact on crude-tanker supply and spot rates in 2019, when the tankers of China’s COSCO (Dalian) were sidelined after carrying Iranian crude.

Will it happen again in 2020?

The Treasury Department’s Office of Foreign Assets Control (OFAC) announced Tuesday that it had sanctioned four tankers and their operating companies because they loaded crude oil for export in Venezuela.

These include two very large crude carriers (VLCCs; tankers that carry 2 million barrels of crude...

https://s29755.pcdn.co/news/us-targets-greek-tankers-carrying-venezuelan-crude

Remember the trade war? It’s back and at risk of escalating

President Trump

The U.S.-China Phase One trade deal is not dead, but it is on life support.

The two superpowers’ deteriorating relations in the wake of a Chinese security law covering Hong Kong has implications for container, tanker, dry bulk and gas shipping demand, as well as shipping stocks.

President Donald Trump alleged in a speech on Friday that China “ripped off the United States like no one has ever done before,” and “got away with theft” of hundreds of billions of dollars a year; that China “raided our...

https://s29755.pcdn.co/news/remember-the-trade-war-its-back-and-at-risk-of-heating-up

Commentary: What US business post-COVID can learn from shipping post-2008

Manhattan

The focus on ocean shipping vis-a-vis COVID-19 has been on what the outbreak means to the economy and what the economy means to vessel demand and freight rates.

But there’s a different way to look at it: by focusing instead on what ocean shipping has to say about the COVID-19-era economy.

The global financial crisis in 2008-2009 differs in many ways from the current crisis. Even so, what befell shipowners in the decade after the Great Recession offers telling parallels to what U.S. businesses...

https://s29755.pcdn.co/news/commentary-what-us-business-post-covid-can-learn-from-shipping-post-2008

BREAKING: New York terminal operator sues Maersk for ‘tens of millions’

container terminal

Container carriers and terminal operators could increasingly come to blows as COVID-19 rewrites the global business equation. A now-escalating court battle in New York could be a taste of things to come.

In one corner: Maersk Line and Hamburg Sud, owned by AP Moller Maersk (APM), the largest container carrier operator in the world, with group revenues of $39 billion in full-year 2019.

In the other corner: Vancouver, British Columbia-based Global Container Terminals (GCT), which operates the...

https://s29755.pcdn.co/news/breaking-new-york-terminal-operator-sues-maersk-for-tens-of-millions

Dry bulk flounders as coronavirus threatens Brazilian exports

dry bulker

Once upon a time, believe it or not, stock investors were obsessed with dry bulk shipping. That Bizarro World dynamic won’t be happening again anytime soon if today’s abysmal spot rates are any indication.

Rates for Capesize bulkers (vessels with capacity of around 180,000 deadweight tons) fell yet again on Wednesday, to $3,796 per day, according to the Baltic Exchange’s 5TC index. The tentative bounce beginning in late April has long since fizzled. Futures markets currently put the full-year...

https://s29755.pcdn.co/news/dry-bulk-flounders-as-virus-threatens-brazilian-exports

LPG shipping: volatile, spot-exposed, leveraged to COVID-19

LPG ship

Crude and product tankers have garnered all the headlines in 2020, but liquefied petroleum gas (LPG) shipping could offer a clearer-cut and more binary bet on the coronavirus recovery.

Higher oil production and refining would create more propane and butane as byproducts, filling more LPG carrier cargo holds. Unlike crude and product tankers, LPG carriers face no near-term headwinds due to the unwinding of floating storage.

LPG shipping companies boast high spot-market exposure and volatility....

https://www.freightwaves.com/news/lpg-shipping-volatile-spot-exposed-leveraged-to-covid-19

Import cuts could trigger more shortages as states reopen

container terminal

After “blanking” (canceling) around 20% of Asia-to-U.S. capacity this month and next, it now appears almost certain that carriers will cut fewer sailings in July.

Ocean carriers had previously blanked about 10% of July capacity and there have been no additional trans-Pacific reductions for that month over recent weeks.

On the contrary, a rising number of previously canceled sailings have been “unblanked.” THE Alliance (Hapag-Lloyd, ONE, Yang Ming) has reinstated four China-Los Angeles voyages,...

https://s29755.pcdn.co/news/import-cuts-could-trigger-more-shortages-as-states-reopen

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