China’s surprising turn towards COVID offers new hope to maritime markets

In the shipping sector, cargo suffered a significant drop in demand due to the COVID lockdowns in China.

Container trade could take time to recover as Chinese trade data for November was “dismal”, according to Pantheon Economics. “We expect exports and imports to deteriorate in the coming months, before improving…in the course of 2023 as China recalibrates economic policy and weathers a likely wave of COVID exit.” Another weakness that was mentioned was the drop in foreign demand at the level of supply chain interruptions.

According to analysts Amit Mehrotra and Chris Robertson, they expect a lag before the new COVID policy boosts markets. “We don’t think it will manifest in a significant way until the second quarter of 2023.” They believe the spread of infections is more likely in the winter months, which could delay the practical effects of the policy change.

(Freightwaves, 2022)