Coronavirus Threatens Global Slowdown


Breakbulk Sector Uncertainty Rising

The impact of the novel coronavirus on breakbulk activity is expected to grow as commodities indices slumped in January on fears of a global slowdown.
 
Dry-bulk cargoes index Baltic Exchange Capesize has fallen steeply, down 99.95 percent since the start of the year, as consultancy Alphaliner estimates that global port throughput could be down as much as 0.7 percent. 

“China-U.S. freight rates have yet to show the impact of the crisis, likely because carriers had announced record blank sailings through early March even before the outbreak and because rates are already quite depressed, down 26 percent compared to last year,” said Eytan Buchman, Freightos chief marketing officer.


Death Toll Rising

The coronavirus has wreaked havoc on global trade routes since it was first identified in in Wuhan, Hubei Province, China, in December and is widely expected to drive down freight rates worldwide. The current number of deaths officially attributable to the virus has passed 560 according to the World Health Organisation, or WHO.
 
A reduction in demand for oil and refined products and stringent quarantine checks are acting as a brake on the global transport sector, with the repercussions likley to be felt across the breakbulk sector.
 
To date tens of thousands of confirmed cases have been reported worldwide with the majority in China. The country has been in lockdown with one of the biggest quarantine programs in history underway to try and contain the virus.
 
“The hit on trade has been limited but already there are signs that less fuel is needed because of restrictions on travel and that in turn affects transport of oil and freight rates for tankers. Any port closures that might happen would be a further dampener and could impact other types of cargoes,” Malcolm Latarche of ShipInsight, notes.


US$675 Million for Global Preparedness

WHO estimates that at least US$675 million will be needed to develop a preparedness and response global plan for the virus.
 
 “Urgent support is needed to bolster weak health systems to detect, diagnose and care for people with the virus, to prevent further human to human transmission and protect health workers.” said WHO Director-General Dr Tedros Adhanom Ghebreyesus.
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