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The week in charts: More blank sailings, China shows early signs of recovery

Container-related port calls suggest China is increasing exports, while Bahri provisionally charters two more VLCCs, boosting rates

There was a considerable jump in the number of blank sailings announced on deepsea trades this week, while the Baltic Capesize Index moved into positive territory for the first time since late January

BLANK sailings have been a dominant feature of container shipping’s response to the demand shortfall during the coronavirus outbreak, in a trend that looks set to continue amid a raft of fresh service announcements to align capacity.

New analysis by SeaIntelligence shows that in the space of a week the number of blank sailings on the major deepsea trades announced from mid-March (week 12) through to the end of May (week 24) had jumped from just two to as many as 45 (as of noon Central European Time on March 29).

This development tallied with SeaIntelligence’s expectations from last week off the back of conversations with both beneficial cargo owners and logistics providers, who revealed that purchasing orders were being cancelled at a rapid pace. As such, further blank sailings should be expected as carriers turn to the practice to support freight rates.

The majority of the latest round of blank sailings were announced towards the end of last week, and predominantly on the transpacific and Asia-Europe networks.

(If viewing on a mobile device, select the Open Media option to view the charts)

 

Despite the rise in blank sailings, Lloyd’s List Intelligence data suggest that China is increasing exports in line with the year-ago trend.

Vessel calls by container-related vessels, including boxships, general cargo vessels with container capacity, con-ro vessels and container barges, have begun tracking in the same direction as they were in the corresponding week of 2019.

While week 13 figures remain slightly below those of 2019, vessel calls have returned to their seasonal trajectory after showing a sharp decline in the weeks following Chinese New Year and another dip in week 9.

 

 

Also linked to China’s economic recovery, the Baltic Capesize Index moved back into positive territory for the first time in just over two months this week.

The BCI was at 268 points on Thursday, the third day it has been in positive territory. It had dipped into negative territory at the end of January, pulled down by an extremely negative C16 backhaul route. That prompted the Baltic exchange to review calculations and weightings of the index.

With China resuming work activities following a lockdown to contain the rapid spread of the coronavirus, its manufacturing index reached 52 in the most recent weekly data. That compares with a low of 35 during February.

This improved manufacturing number is an early indicator that the economic situation in China is improving, according to BIMCO’s chief shipping analyst Peter Sand, but it would need to get to around the 80 mark to show that it is “out of the woods”. It could take a number of months to get back to pre-virus outbreak levels, he added.

The average weighted time charter on the Baltic Exchange closed on Thursday at $6,013 per day, a gain of 57% from a week ago.

 

Finally, Saudi Arabian shipping company Bahri chartered in another two VLCCs within five days this week for deliveries to Egypt, the US Gulf and Asia, as part of its strategy to flood the world market with its oil.

It provisionally chartered the 2011-built Island Splendor for Worldscale 250 on Tuesday, which equates to a daily rate of $326,220 for a Middle East Gulf to Red Sea voyage, Tankers International data showed. If finalised, that would further lift already increasing charter rates.

But two provisional deals it agreed to earlier this week fell through, potentially because there was no storage space available or capacity on the oil pipeline at Ain Sukhna.

Bahri has its own fleet of tankers, including 41 VLCCs, with moves to take additional tonnage rarely seen in the market. Saudi March preliminary crude export figures tracked by Lloyd’s List Intelligence totalled 241m barrels on 172 tankers, equivalent to 7.79m barrels per day.

 

Lloyd's List webinar

Join Lloyd’s List managing editor Richard Meade and a panel of leading shipping and bunker industry experts for the Lloyd’s List ‘Future Fuels Webinar’, taking place at 9am BST/4pm SGT on April 23, 2020.

It will offer an insiders’ view of how shipping will fuel its future and how businesses can avoid the transitional pitfalls along the way.

Key talking points will include:

  • The risks and impact of changing emission regulations

  • The changing fuels landscape

  • Analysing the feasibility of alternative fuels in the R&D pipeline

Speakers:

  • Chaired by Richard Meade, Managing Editor, Lloyd's List

  • Christos Chryssakis, Business Development Manager and maritime fuel expert at DNV GL – Maritime

  • Unni Einemo, Director, International Bunker Industry Association

  • Chris Chatterton, COO of the Methanol Institute 

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