Delivery must wait for the trading flow adjustment in front of the tariff: V. Group
The sender must wait for what can be a change in the sea in the flow of trade because of the expected inflation rates and pressures, the CEO of the V. Group Ship Management Company said in an interview.
Although there will be an increase in pressure for the home industry, this process can take time and, in the midst of inflationary pressure, goods will find new markets and new trading patterns will emerge, Rene Kofod-Olsen, CEO V. Group, told Platts, part of the S&P Global Commodity Insights.
“From the delivery perspective, you cannot do anything because cargo must be moved,” said Kofod-Olsen. “In the end, consumers will pay the price, so there is an aspect of inflation.”
The company manages more than 3,000 ships, according to its website.
The impact of the tariff conflict between US administration Donald Trump and his trading partners can change the supply chain and affect the decline in overall demand potential because the economy is deteriorating, according to professional shipping and the energy market. Likewise, the narrative that developed around the cost of the US port on ships made in China.
Before inflation began to erode general demand, containers and dry bulk shipments are the two largest risk sectors of changing tariffs, because many trade in consumer goods and agricultural products between the US and China, according to analysts.
Both of these sectors have seen prices down since Trump announced the “Liberation Day” tariff regime in early April. The container platts index ended on April 23 at $ 2,109.75/forty of the equivalent feet, down 13% from the beginning of the month, and the global platts dry bulk index fell 19% from the beginning of the month to $ 13,465/day the equivalent charter for ships that were not equipped with $ 13,465/day.
Conversely, the VLCC platts index has increased 36% from the beginning of the month to $ 49,941/day TCE on April 23 for unpouted ships and non-ECOs.
Russian sanctions are the most difficult to follow
There are international sanctions for the transportation of oil from Russia, Iran and Venezuela and all of this headache at this time for the tanker market. In an effort to avoid the fall of the sanction regime, the company must avoid a business with the so -called called the ship’s shadow ship fleet.
V. Group has been fully compliant with sanctions since they came into force and needed “all troops” of staff to be this time every time the company worked with this ship means seeing partners and all trading patterns involved in, said Kofod-Olsen.
“It is very clear that the world will not accept the dark fleet as part of world trade, most of the perspective of accountability,” Kofod-Olsen said. “This is a risk conversation, which is clear [vessels] Not maintained with the same standards … This risk and politicians need to go to this, “he said.
Russia presents the biggest sanction challenge because the large part of the market that Russia represents: “That is very complex because you have all the trade and remember that Russia is still exporting,” Kofod-Olsen said.
Russian crude oil exports, not including barrels offered by suppliers of Kazakh, on average 3,449 million b/d until April 22, equivalent to 3,571 million b/d March, according to data from S&P Global Commodities at Sea. As in March, India and China lifted 78% of the volume of the moon-to-date, the data showed.
Approved ships have facilitated 15% of the export volume this month, an increase of three points from the proportion observed in February and March, CAS data shows.
Waiting for the Development of the Red Sea
As a boat manager rather than a tenant or owner, V. Group cannot refuse to transit the Red Sea, to avoid Houthi attacks. However, because V. Group “had just stopped transit” when the problem began at the end of 2023, it was clear that a wider industry saw the threat seriously.
When they began, these attacks were related to the Israeli-Hamas war and while the settlement of peace there proved difficult to understand, there were no attacks confirmed on the delivery of traders in the region since November.
Since the beginning of the Gaza conflict, the Suez Canal Traffic has consisted of ships related to China or those who transport Iranian and Russian oil, and most of the mainstream and appropriate fleet continue to avoid the Red Sea because security issues remain.
Even so, the transit of the tanker through the Suez Canal saw a strong rebound in March, up 40% from February to 411 ships. The larger tanker class contributed significantly to the increase, with the share of the ship laden also rose to 44%, according to CAS data.
This happened though or because Trump increased air strikes on Yemen against the Houthi movement in March and warned them to stop attacks in the Red Sea. Egyptian Prime Minister Mustafa Madbouly noted in April that navigation security had increased in the area.
V. Group has had about eight red sea transit ships since January, said Kofod-Olsen.
The sound of a clearer trust in security in the region is if the container continues transit in meaningful amounts, the word kofod-oisen.
Source: Platts
