Clarksons Research has downgraded its seaborne trade growth forecast for 2022 as economic headwinds buffet shipping.
The prediction of 3.5% growth at the start of this year has been downed to 1.6%, well below the 10-year trend of 2.2%.
The UK research company said the figure suggests seaborne trade will reach 12.2bn tonnes this year.
Tonne-mile projections are proving more resilient, with growth expected to be 2.9%, down from a 4% forecast at the start of 2022.
This is marginally above a 10-year trend of 2.6%.
“The impact of the Russia-Ukraine conflict remains complex, with direct and indirect effects on trade patterns (as Europe and Russia seek alternative import/export markets) and trade volumes (demand destruction from slowing global economy or disrupted supply) still evolving,” the company said.
Tanker markets continue to benefit from disruption, with average earnings across March to May three times the January to February average.
Lockdowns and economic pressures are weighing on Chinese trade, however, the company said.
Chinese imports to fall
Clarksons Research is now forecasting China's seaborne imports to decline by 2% in 2022, and for exports to remain flat.
“However there is upside if stimulus policies are re-introduced later in the year or if strategic reserves are built, currency depreciation continues and tariff removals stimulate trade,” the company said.
Dry bulk volume growth is forecast to be weak at 0.1%, with huge uncertainty over grain and coal trades, but tonne-miles more resilient at 1.4% growth.
Boxship bonanza coming to an end?
In terms of boxships, volumes may still be near all-time highs, but Clarksons Research argues that a cocktail of economic factors is hitting prospects for the sector.
David Whittaker, an analyst at the UK company, said container trade growth has long been expected to eventually normalise from the spectacular post-Covid rebound seen in 2021.
He added that logistical congestion continues to support “extraordinarily strong” markets.
But trade growth has started to come under pressure, with clear headwinds triggering material downgrades to the outlook.
Global box trade is estimated to have fallen by 1.4% year on year in the first quarter of 2022, a second consecutive quarter of decline, though volumes remained 5% above pre-Covid levels.
Whittaker argued that macroeconomic headwinds have built, including from the knock-on impacts of the war in Ukraine.
GDP outlook gloomy
Global GDP forecasts for 2022 have generally been downgraded by more than 1% from pre-conflict projections.
And consumer activity in many economies is faced with major inflation and a cost-of-living crisis.
The analyst said Chinese lockdowns have led to some “lost” volumes.
More “normal” demand patterns are emerging as some consumer spending switches back towards services from goods, he added.
Clarksons’ global seaborne container trade growth projection for 2022 has been downgraded to 1.3% in teu terms, compared with 3.9% before the war.
Is negative growth possible?
Whittaker warned even more severe downside scenarios are possible, raising the spectre of negative growth.
However, a moderate expansion of 2.7% is pencilled in for 2023.
“So, the demand outlook now looks more difficult, which could eventually contribute to a trend towards more normal market conditions when congestion starts to wind down (no sign yet) and capacity growth accelerates,” Whittaker concluded.
“However, for now, and despite all of this, enduring disruption upside continues to support extraordinary container shipping market conditions.”
