News ID: 80129 |
Publish Date: 15:58 - 17 July 2018

US-China trade war good for drybulk shipping

Ongoing tariff tussle may increase tonne-mile demand as China looks to South America for soybeans, according to an analyst.

The ongoing trade war between the US and China may benefit the drybulk sector as long as it does not hamper the global economy, a Jefferies analyst says.

The world's most populous nation receives more than 85% of its soybean products from the US, Brazil and Argentina, Randy Giveans points out in a note to clients.

"An uptiick in demand for South American soybeans would increase tonne-mile demand for drybulk carriers as the voyage is longer from Brazil/Argentina to China that from the US to China," he wrote.

The shipping route from Port of Santos, Brazil to Shanghai is 11,175 nautical miles, according to Marine Traffic. The distance between New York and Shanghai is 10,651 nautical miles.

The Trump administration plans to place a 10% tariff on $200bn in Chinese imports, having already levied a 25% tax on $50bn in goods coming from the country.

President Donald Trump accuses China, having imposed retaliatory tariffs against the US, of unfair trade practices and intellectual property theft.

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