Will somebody please tell commodity shippers there’s a trade war going on?
Whether it’s the price of hiring giant freighters to haul hundreds of millions of tons a year of iron ore and coal, or smaller carriers moving grains, there’s a theme emerging: dry-bulk shipping rates are rallying despite an escalating trade war that may yet damage China’s economy.
“Freight traders don’t believe in that,” said Eirik Haavaldsen, a shipping analyst at Pareto Securities AS in Oslo. “They don’t see that weakness. They are not afraid of China slowing down, or a massive drawdown in inventories.”
There are two main reasons why commodity shipping markets aren’t yet feeling the pinch, according to Espen Fjermestad, who follows shipowners at Fearnley Securities in Oslo. The first is that China’s economy is so far proving resilient, the second is that direct trade between the U.S. and the Asian country is relatively small within the context of overall commodity shipping demand.
Read more on Bloomberg.