The unexpected adjustment of epidemic prevention policy has brought new hope to the shipping market

According to market opinion, China is relaxing prevention and control restrictions faster than intended, which will support the demand of oil tanker and dry bulk cargo market and improve ContainerShippingThe state of the market.

The sudden shift in policy comes amid a decline in Chinese EXP, with the government reporting last Wednesday that the value of commodity EXP fell 8.7% in November from a year earlier.

EXP to the U.S. fell 25% year-on-year, double October's 12.6%.Since June, Chinese EXP to the United States have fallen by 27%.The US accounted for just 13.8% of total EXP last month, down from 17% in July.

It may take some time for Container trade to resume.

"China's November trade data poured cold water on us after we expected imports and exports to deteriorate in the coming months and then improve in 2023," Pantheon Economics wrote.

Evercore ISI analyst Neo Wang notes that the government's action is three months ahead of what we did in intended, but even so, he warns recovery will take time.

"Policy changes could lead to heightened public fear, spread infections, labor shortages and the economy may not recover quickly," Wang warned.

Another reason why Container's EXP will not climb immediately is that Pantheon Economics pointed out that the current weakness is more due to the decline of overseas demand than the interruption of supply chain blockade.

Chinese EXP product data showed a similar picture: electronics shipments fell as consumers changed their spending patterns, while auto EXP was strong as carmakers rushed to catch up with previous orders."

A boost in tanker demand may come soon

Weak demand for crude oil in China was one of the main reasons for the drop in freight rates last year and earlier this year.In recent months, the recovery of crude oil production has supported the high operation of VLCC freight rate.

"Going forward, China's reopening policy is likely to have a clear positive impact on the VLCC market because China is the largest super VLCC lessee,"JefferiesShipping analyst Omar Nokta said.

With the relaxation of COVID-19 restrictions, Chinese citizens have become more mobile and consume more fuel, so the demand for crude oil imports is higher.Argus reported Wednesday that China's liquidity is already improving, as are gasoline profit margins.

According to the survey in Argus, Chinese oil companies increased their crude oil purchases by more than 16.4 million barrels in the first week of December, which means that China's crude oil imports in December will increase significantly compared with 26.4 million barrels in November.Ten thousand barrels.

Dry bulk cargo has an upward trend, but it will be significant in all shipping in 2023PlateAmong them, dry bulk cargo has the greatest impact on China.Dry bulk demand has been hit hard by China's COVID-19 lockdown and the housing market crisis.

Amit Mehrotra and Chris Robertson, analysts at Deutsche Bank, said: "Getting rid of restrictive anti-epidemic measures and stabilizing and supporting the domestic real estate market are the key to strengthening the fundamental demand for dry bulk goods."

Mehrotra and Robertson said: "Policy liberalization will give a boost to the dry bulk market, but the impact is expected to be delayed and it will take some time to show. We don't think this will happen until the second quarter of 2023."It will only appear significantly this quarter.In winter, the possibility of virus transmission is high, and the actual effect of policy changes is unknown Show.

On December 1st, Liz Gao, a global analyst at Standard & Poor's, also predicted lag."China will have a Lunar New Year holiday in January, and Chinese citizens will see a surge in travel, so Omicron will spread faster," she noted.

"For dry bulk cargo," said Jeffrey Landsberg, president of Commodore ResearchShippingOn the other hand, the demand from China will rise unexpectedly, which is a good time to be bullish. "

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