Shipping’s Hopes of a Swift Demand Recovery Might Have to Wait Until 2021
According to Stelios Kollintzas, Tanker Chartering Broker, “Black Sea sunflower oil export season kicked off poorly due to heavy logistical issues which disrupted the flow of oil to loading terminals in Ukraine. A surge in Ukrainian sunflower oil prices in September also caused delays, as traders struggled to secure cargoes at profitable levels. Sunflower trade seems to be en route to recovery with healthy enquiry volumes being observed among all major destinations for November. Rates are looking up for eastbound long-haul voyages since East of Suez market is still weak and there are not many owners willing to reposition their vessels. However, it will be no surprise if things turn the other way around soon. The Med CPP market is also in doldrums but there are now signs of improvement in the eastern hemisphere”.
According to Mr. Kollintzas, “slow palm oil demand in Europe resulted in fewer stems for October/November loadings. October cargoes have been covered and the rest of the FOSFA tonnage is waiting for November requirements to be worked. Regional activity has improved due to China’s recent stockpiling which has increased its palm oil imports. Together with ample small and intermediate tonnage availability, Indian and Chinese demand for palm oil are on the rise. Moreover, palm production in both Malaysia and Indonesia has declined due to weather disruptions coupled with the lack of manpower (due to COVID-19 work restrictions) required for harvesting the fruits. Therefore, traders are now importing in view of a palm oil price increase in the near future. Looking beyond the pandemic, we hope that freight markets will continue to normalize, however, the establishment of a healthy supply/demand equilibrium will likely take at least till next year. For the time being, it looks like business will keep on moving sideways”, Kollintzas concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide