Global Trade Shows and Supply Chains Remain Unbalanced

After a relatively strong first half of the year, global trade has entered the slow lane.

Global merchandise trade has held up well so far this year given the volatile and uncertain environment, with world goods trade standing at 4.4% year-to-date (January to August) according to CPB world trade data. In the first half of the year, consumers’ appetite for goods was still running high compared to the year before, but with a shift back to services and travelling, and with people worrying about the rising cost of living, things changed over the summer.

On the back of a relatively strong first half of the year, global trade will likely see a growth rate of 3.8% for the whole of 2022, but amid headwinds the pace is slowing quickly. For next year, we expect merchant trade growth to slow to just 1.2%, as discussed in more detail in our trade outlook for 2023. This falls behind expected GDP growth. Continue reading here (Source: Hellenic Shipping News).

Oil Prices Slide USD2/Barrel on China Demand Worries, US Midterm Elections

Oil prices fell more than $2 on Tuesday in choppy trading on growing worries about fuel demand as COVID-19 outbreaks worsened in top crude importer China, and jitters about the outcome of U.S. midterm elections.

Brent futures for January delivery fell $2.56 to $95.36 a barrel, a 2.6% loss. U.S. crude fell $2.88, or 3.14%, to $88.91 per barrel.

"The market is entering today with a certain degree of skepticism surrounding the election... It's a wait to see what the result is type of a situation here," said Bob Yawger, director of energy futures at Mizuho in New York. Continue reading here (Source: Reuters).

Chinese Trade Unexpectedly Drops as Demand Slowdown Worsens

China’s exports and imports both unexpectedly fell for the first time in more than two years, with rising risks of a recession causing overseas consumers to buy less and domestic problems such as Covid Zero controls and a housing slump hitting demand at home.

Exports in dollar terms fell 0.3% in October from a year earlier, the customs authority said Monday, well below the 4.5% gain projected by economists. Imports also fell, with the 0.7% decline the first drop since August 2020. That left a trade surplus of $85.15 billion.

The weakness in exports adds to the domestic pressures on an economy which is already struggling due to the property market slump, persistent disruptions from Covid controls, and weak consumer spending. Resilient exports had been a major support to China’s recovery in the past two years due to strong international buying, but that looks to have reversed, with demand from the pandemic disappearing just as the war in Europe boosted global inflation and uncertainty. Continue reading here (Source: gCaptain).

Biofuels Use in the Shipping Industry Could Soon Gain Traction

The use of biofuel blends in the shipping industry could become the norm in the following years, as they seem to make a lot of sense, as a stop-gap solution, until fossil fuel alternatives are available at a larger scale. In its latest weekly report, shipbroker Gibson said that “iquid biofuels are expected to have an important role to play in meeting future fuel requirements as the energy transition progresses and petroleum demand begins to come under pressure. Increasingly, these required biofuels will be from second and third generation biofuels based on non-food crops, nonarable land, and waste products, whilst fourth generation biofuels will expand the possibilities even further through production optimization improving yields, reducing production emissions and improved chemical performance through genetic engineering. The EU Fit for 55 package of policies makes it clear that future biofuel supply must be at least from second generation blends not competing with food supply”. Continue reading here (Source: Hellenic Shipping News).

Crude Tanker Owners See Dollar Signs As Russia Ban Draws Near

The European Union’s ban on imports of Russian crude is now less than five weeks away. As the clock ticks down to the Dec. 5 deadline, crude tanker owners expect trade dislocations from the Russia-Ukraine war to intensify, propelling spot rates even higher.

“A key driver of the oil marketplace over the last six months is about to hit its last — but most impactful — phase,” said Brian Gallagher, head of investor relations at crude tanker owner Euronav, on a quarterly call Thursday.

Kevin Mackay, CEO of Teekay Tankers, said during his company’s call on Thursday: “The redrawing of global trade patterns [following Russia’s invasion of Ukraine] is the largest single factor behind current strength in rates. The forthcoming ban is set to significantly increase that impact.” Continue reading here (Source: American Shipper).

Tropical Storm Nicole on Track to Strengthen Into Category 1 Hurricane as it Approaches Florida

Tropical Storm Nicole has gotten stronger – with scattered showers impacting parts of Florida this midterm Election Day – and is expected to strengthen more before slamming the state’s east coast early Thursday as the first hurricane to strike the United States in November in nearly 40 years.

Hurricane warnings remain in effect Tuesday for parts of Florida ahead of Nicole’s expected landfall early Thursday morning north of West Palm Beach as a Category 1 hurricane with torrential rain and damaging winds, as many across the state continue to endure the aftermath of Hurricane Ian. Continue reading here (Source: CNN).

Port of Rotterdam Will Mandate the Use of Mass Flow Meters on Bunker Barges

The Port of Rotterdam ‘intends to make the use of mass flow meters mandatory in Rotterdam on behalf of bunker fuel for maritime shipping,’ Tie Schellekens, press officer at the port, tells Bunkerspot.

Rotterdam will become only the second global port to give the green light to the mandatory adoption of mass flow meters. The Maritime and Port Authority of Singapore (MPA) enforced the use of mass flow meters for all distillate bunker deliveries from 1 July 2019 and for heavy fuel oil deliveries from January 2019. The MPA’s action has been widely acknowledged to have been the catalyst in ‘cleaning up’ the port’s reputation for widespread malpractice in terms of short delivery.

Confirming Rotterdam’s intention to mandate MFMs, Schellekens said the port authority had conducted research into quantity issues at the port and by mandating the use of ‘a mass flow meter bunker system’ the Port Authority ‘wants to make the market more transparent, efficient and reliable.’ Continue reading here (Source: Bunkerspot).