Euronav flags US politics, China economy as risks to shipping momentum (updated)

CMB.TECH NV

08/08/2024 08:44

(Adds details on China in paragraph 6, context in paragraph 8)
       Aug 8 (Reuters) - Euronav  CMBT.BR  expects a rise
global sea trade this year driven by the rerouting of Red Sea
shipping though a change in the U.S. presidency and a slowdown
in China's economy are risk factors, the Belgian oil tanker
company said on Thursday. 
    Seaborne trade is on track to increase by 5.1% this year,
with the Red Sea re-routing contributing approximately 3.0% to
tonne-mile trade growth, the company said in a press release. 
    Currently experiencing some of its highest returns in
decades, the shipping industry expects this trend to continue,
if the status quo holds, the group said. 
    Many container ships are currently taking a longer route
around the Horn of Africa due to attacks by Yemen's Houthi
militants in the Red Sea region, in what they say is solidarity
for Palestinians in Gaza.
    Euronav noted that a change in the U.S. presidency in
November's elections could have an impact on global geopolitics,
with ocean shipping being a key area of focus. 
    Donald Trump is expected to take a more aggressive stance on
China if he returns to office and a potential increase in trade
tariffs could negatively affect global trade, and by extension,
shipping.
    Euronav also pointed out to uncertainty for global oil
demand in the third quarter, partly due to China's struggling
economy. The country's low consumer spending and high
unemployment could lower its energy consumption, impacting
global oil demand, Euronav said. 
    Although the U.S. summer driving season might support oil
prices via higher gasoline consumption, geopolitical issues
between Ukraine and Russia and in the Red Sea, along with
China's economic problems, add unpredictability that might
impact Suezmax and VLCC rates, it added.
    Danish shipping company Maersk  MAERSKb.CO , seen as a
bellwether of global trade, said on Wednesday it anticipates a
slowdown in global container shipping growth following a robust
first half of 2024, marked by customers stocking up to avoid
disruptions.
    


 (Reporting by Alban Kacher; Editing by Sharon Singleton
alban.kacher@thomnsonreuters.com)
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