Typical market volatility has given way to a profound lack of predictability this year.
Market dynamics have been rocked by China’s economic downturn which has been driven by the curtailing of its real estate market, a broader domestic demand decline, and the government’s zero-covid policy slashing industrial output. A recent Chinese leadership reshuffle has also damaged confidence in the country’s firms from international investors.
While we wait to see what happens with China’s muted stimulus initiatives, the US and Europe are edging closer to the brink of recession, and it remains to be seen how that will affect widespread demand and investment.
Short-term impacts have added to the upheaval. Ukrainian grain exports remain uncertain and a spate of droughts in other countries have reduced stocks. We have seen a spike in energy prices that is having wide reaching and variable effects.
Charterers’ supply chains have also experienced disruption, including labour shortages, port delays and the impact of weather events.
Add impending environmental regulation into the mix and bulk trade is certainly in choppy waters.
Will we see glimmers of opportunity that could blunt the bearish outlook for 2023? We’ll look to different trading patterns for coal, iron ore and steel commodities to see what arises. Potential investment in green infrastructure could also offer a reprieve.
As dynamics are shifting on such a frequent basis it is impossible to predict the inevitable market fluctuations. Ambiguity is our new normal. However, there’s one certainty – charterers will benefit if they partner with an agile ship operator ready to respond to short-term supply fluctuations and the annual re-shape of the charter market, especially as shipowners respond to CII expectations beyond the 2023 introduction of both CII and EEXI requirements.
While the traditional, asset-heavy bulk sector is steeped in heritage, Norvic has an agile, progressive business model that is strongly positioned for navigating challenging market conditions and empowering clients to do the same.
We have access to an extensive, global network of ships that we charter and fully operate so that we can connect cargo with the most appropriate, modern vessels, on the most efficient routes. Norvic currently operates a range of vetted dry bulk carriers including handysize, supramax, ultramax and panamax vessels and, to date, we have transported over 35 million metric tonnes of cargo annually.
The quality of Norvic’s networks is underpinned by its deep and collaborative relationships with ship owners and brokers. This ensures that we can deliver optimal shipping solutions for any dry cargo. We call this ‘flex-appeal’.