Vessels Value said that it had used satellite tracking technology to compare China’s real-time demand for seaborne crude oil from the Middle East in recent weeks against the same period last year, and the decline has been dramatic.
The outbreak of Covid-10 coincided with Chinese New Year, so Vessels Value compared data from the same period in 2019 alongside this year.
Using a metric of billion ton miles, where a ton mile is a ton of cargo that’s travelled one nautical mile by sea, Vessels Value noted that in recent weeks, this had fallen almost to zero, from a 2019 average of 3.42bn ton miles per day.
It observed that most years there was a mild slowdown of activity in Chinese ports surrounding the Chinese New Year, but this year the effects had been significantly compounded.
Across wider shipping markets:
- Sale and purchase of vessels had almost completely stopped.
- Newbuildings (which mostly happen in Asia) are being delayed due to the inactive workforce
- Charter rates (vessel earnings) are down.
Based on VV Charter Rate assessment the cost per day of hiring a VLCC for 12 months has fallen by over 20% over the past month, from $53,460 per day on January 14th to $42,250 today. Spot earnings had fallen by over 70% during the same period.
Vessels Value concluded that “an event like coronavirus really does show the gravitas of China on global shipping markets”.