It’s unusual for small ships to be more valuable than large ones. But that has been happening in the tanker and dry bulk shipping area. The disruptions of 2022, following on Covid, have created markets better served by smaller ships.
One source of large dislocations in markets is a result of the Ukraine war. Because of sanctions, China has stopped shipping crude from Arabia. That was a channel that favored VLCC tankers. In addition, Russian exports of oil favor the use of smaller ships.
But other markets, too, have seen this effect as well. China, for instance, has reduced imports of iron ore and coal, partly due to Covid restrictions, and partly due to the deep slowdown in Chinese construction, requiring less steel production.
Clarksons, the shipping consulting firm, expects a reversal to more normal price differentials by 2024.
Greg Miller Wednesday, July 13, 2022
In topsy-turvy commodity trades, small ships outperform big ships
Supply Chain and Logistics 