Global shipping consultancy Drewry predicts dry bulk charter rates will increase due to the US-China trade war, according to its latest Dry Bulk Forecaster report.
The US and China have placed billions of dollars’ worth of tariffs on each other’s products in 2018, and Washington is preparing to hit Chinese imports with an extra $200 billion in a matter of days, with only the percentage of the tariff yet to be decided upon.
For that reason, Drewry expects charter rates, the charge that a ship owner can demand for loaning a vessel, to rise as demand outpaces supply.
Drewry said that it was “unlikely” that the tariff war would negatively effect on the dry bulk market, as China is likely to switch from the US to other sources for its imports.
Rahul Sharan, Drewy’s dry bulk shipping analyst, said: “Though we expect trade wars not to have a direct negative impact on the dry bulk trade, there exists a possibility that they might adversely affect the Chinese economy.
“The US is China’s largest trading partner, accounting for around 18% of total Chinese merchandise exports, in terms of value.
“High tariffs will hurt China’s exports and impact its GDP growth, and in turn instigate a slowdown in its industrial activity, which will undermine the country’s steel consumption.”