BOSTON big-data company CargoMetrics
says imports from China into the US “are in freefall?according to CEO
Scott Borgerson and Dan Brutlag, head of trading signal and data
After February 7, volumes began to
nosedive, with the pace of declines accelerating through February 17,
the last day of the index data provided by CargoMetrics, reported
Dry cargo volume is down around 40 per cent compared to the month before Chinese New Year, Mr Borgerson said.
CargoMetrics also tracks oil flows. "The export data is agnostic to
destination so that volume is not necessarily going to China, although
historically, a great deal of it has,?said Mr Brutlag.
What the data shows is that the volumes are actually up, from 24.9
million barrels per day on Chinese New Year to 27.7 million b/d on
The way to resolve this apparent contradiction is to understand that it
takes 30-40 days for transport crude oil to China. The question is
whether they’ll be able to unload when they get there.
“The anchorages could start to get pretty filled up and the ships could
become floating storage facilities,?said Mr Borgerson. “On one hand,
that could have a counterintuitive positive effect on freight rates. On
the other hand, if commodities can’t get imported to China, which is the
main driver of everything globally for freight and commodities, that is
not good,?he said.
What happens in the next few weeks is “critical,?said Mr Borgerson.
“Shipping moves 90 per cent of the planet’s trade, and while China is
not literally an island, its economy is figuratively one because it
imports nearly all of its raw materials and exports nearly all of its
finished goods by sea. So, the lens we apply is very much a leading
indicator for Chinese industrial activity and productivity,?Mr Borgerson
Pressure on the global trade network could be alleviated if “China gets
people moving around and factories open up, supply chains can deal with
the inventories that are building up, and all the ships that are sailing
there can discharge? he said.