By Godwin Oritse, with agency report
OPERATORS in the global shipping community have said that shipping, not just tankers, needs a growing global economy and trade growth, in order to preserve a sustainable market.
In its latest weekly report, shipbroker Allied Shipbroking said that “undoubtedly 2020 will be one of the most challenging and radically altering years for global markets.”
It said: “China’s economy has already experienced a major step back, with the first quarter clocking a slide of just below seven per cent, with both the poor activity being noted in fixed asset investing as well as the drop in retail sales definitely playing an important role. Even with a rebound in the economy generally being considered a certainty (to some degree at least), what is becoming more and more evident is that the COVID-19 pandemic has slowly been escalating from a short-term tail-risk shock to a long-term recession cycle”.
According to Allied, “despite the fact that in Europe we are already seeing some sort of easing of the extended quarantine measures, something that will hopefully be followed by a strong restart of the local economies, there are many concerns of a reescalation of the virus outbreak, something that may potentially have an even more harmful effect.
“The uncertainty is huge, with every given step forward hiding a risk of an even bigger step back. Beyond these, however, things have been more so shaky in the tanker markets thanks to the recent developments noted in the crude oil market.”
Recent trends in the oil market have left many parties involved with mixed feelings. At the very start of the previous week, WTI future contracts with May expiration date collapsed to negative levels, a historic first for global markets which caught many by surprise”.