The Sea/analytics March Report

31 March 2022

The Sea/analytics team are back with the latest market insights across the industry.

The Sea/analytics March Report

The Sea/analytics team are back with their March report; find out how the Sea/analytics dashboards provide a breakdown of the latest industry news including the effects of the Ukraine-Russia war, Australia’s response to the scramble for coal and the increasing congestion outside Chinese ports.

The Ukraine-Russia War

Ever since the first day of the full-scale invasion of Ukraine by Russia, Sea/analytics has registered a large drop in the number of ships heading towards major Ukrainian ports. The Ukrainian military has suspended all port operations in Ukraine, exporters have declared force-majeure and about 88 ships are still stuck in Ukrainian national waters as per the ‘Current Congestion’ dashboard due to a lack of pilots who have returned home for safety. The platform has also recorded a sudden spike in commercial vessels changing their AIS to Constantza, Romania – a strategic base for the NATO allies in the Black Sea. To put things into perspective, Ukraine accounts for about 10% of the global seaborne grain exports; therefore, a prolonged war could further pressure agricultural commodity flows, pushing prices higher and raising warnings over food security.

King Coal makes a comeback?

According to the Sea/analytics – Tradeflow dashboard, coal imports in Netherlands, Germany, Italy and Belgium were almost 50% higher in 2022 compared to 2021 for the period between late February to late March.  The market shows how the Ukraine-Russia war has exposed Europe’s dependence on Russian natural gas and coal and as such, has prompted a scramble for coal from alternative origins such as Australia. Mining firms down-under have been quick to react and have expedited coal shipments despite an extremely wet season in the region. As a result, due to tight coal supplies and news of several coal-fired power plants delaying their closures to beyond 2030, coal prices reached record highs of $450/Mt.

Another supply chain crisis? 

China is suffering its worst Covid outbreak since the pandemic began. With factories in key manufacturing hubs going into lockdown, queues of container ships outside major Chinese ports are increasing. Despite some restrictions being lifted in Shenzhen, cargo operations are not yet back to normal due to a lack of port staff and truckers. And most recently, Shanghai announced a full-scale lockdown which has added strain to the already stretched container segment. This situation has pressurized the global supply chain yet again and in turn, led to an increase in short term charter rates.

 

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