Despite continued setbacks with the South American economy -- the Brazilian real was down 40% versus the US dollar since the beginning of the year, the Colombian peso was down 31%, the Chilean peso 17%, the Argentine peso 15%, and the Peruvian nuevo sol 14% - a feared drop in dry and liquid bulk shipping volumes to and from the continent has yet to materialise. As Drewry noted in its outlook for 2017, “the dry bulk shipping market has bottomed out and recovery is underway”. The big question is how long will this take until it reaches the levels seen 5 years ago and is there anything that can be done to speed this process up.
The plunge in South American currencies has yet to dissuade the continent’s national oil companies. South American countries imported 859,000 barrels/day (bpd) of petroleum products from the United States and the continent is also importing more LNG. According to IHS Energy, Latin American LNG imports totalled 4.2 million tonnes in 3Q15, up 6%.
On the export front, the fear is that China will curb purchasing of South American commodities. However, the latest volume data does not show a negative trend for shipping, whether it is iron-ore cargoes from Brazil, copper from Chile, or agribulk from Argentina and Brazil. Overall, the data implies that the slowdown in commodity trades is having much more of an effect on pricing, which affects commodity sellers, than on volume, which affects shipping demand.
Overall, the data implies that the slowdown in commodity trades is having much more of an effect on pricing, which affects commodity sellers, than on volume, which affects shipping demand.