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Houthi attacks on ships in the Red Sea, coupled with a rise in piracy off the coast of Somalia, are disrupting global trade. In 2023 an estimated 13% of global seaborne trade transited through these areas. However, the attacks have reduced the number of ships transiting the area by 50%.
The shipping number of the week provides numbers with a brief analysis of relevant developments in the shipping markets.
On 8 June 2022, the European Union (EU) decided to impose a ban on seaborne imports of Russian crude oil and oil products. The ban on crude oil will take effect on 5 December and by then the EU must have found new suppliers and Russia must find new buyers.
During the pandemic retail sales and personal savings have been increasing in tandem and supported US consumer demand for imports from the Far East. Now, retail sales appear to be receding and the question is whether the past two years’ savings will be enough to support continued high import volumes as consumer sentiment is dropping and the war in Ukraine continues.
In 2019, prior to the onset of the COVID-19 pandemic, jet fuel contributed an estimated 8% of oil products’ cargo demand. When travel restrictions were imposed during the pandemic, air travel suffered significantly and jet fuel shipments in 2021 were down approximately 33% compared to 2019. Airlines’ capacity has been on a slow recovery path since bottoming out in April 2020 but remains significantly lower than 2019 levels.
Scrubbers were installed on 399 ships in 2022, a fall of 24% y/y, and currently 13% of bulker, container, and tanker ships have a scrubber installed. Despite the slowing rate of installations, the share of ships with a scrubber is set to increase in coming years as 17% of ships in the shipyards’ order books are expected to have a scrubber installed.
Container ships have reached their highest average age yet at 14.2 years, the highest average age of the three main shipping sectors. The dry bulk fleet has an average age of 11.9 years whereas tankers on average are 12.8 years old.
US soybean, maize, and wheat exports could fall 15% in 2023 due to droughts that affected harvests last year. However, the upcoming maize harvest may drive a recovery in US grain shipments from the fourth quarter onwards.
Over the next ten years, from 2023 to 2032, more than 15,000 ships with deadweight capacity of more than 600 million tonnes are expected to be recycled, more than twice the amount recycled in the previous ten years.
