How the impact of the new coronavirus on the shipping industry

The outbreak of the new coronavirus coincides with the Chinese New Year holiday, and it is also a time when the demand for shipping is low. With the development of the epidemic and the Chinese government's full prevention and control, will the seasonal low of the shipping market be further prolonged?

Dry bulk shipping still relies heavily on China's strong imports. If the epidemic has any adverse impact on the Chinese economy, it will inevitably worsen the seasonal decline that the dry bulk market is experiencing. The implementation of IMO 2020 sulfur regulation is also affected.

The chart below shows China's container throughput, crude oil imports and iron ore imports in 2018 and 2019



China's imports of crude oil products play an important role in tanker transportation. New coronaviruses have affected domestic demand for petroleum products, and there is evidence that Chinese refinery utilization has been declining over the past week, limiting the need for crude oil imports.

Liner shipping depends on external demand, which is still unaffected, but the slowdown in China's manufacturing industry caused by the virus may reduce container exports. Major airlines have begun to suspend more routes.

In such an early stage, the medium-term impact is difficult to predict, but in previous virus outbreaks, the market usually rebounded within a few months. The outbreak of a new coronavirus has added another huge layer of uncertainty to the shipping market.