Europe locked down in March. Many U.S. states followed suit in April. Demand for containerized cargo and oil evaporated overnight. Now, much of Europe is closed down once again. U.S. business restrictions are tightening. COVID hospitalizations are reaching new heights. And ocean shipping demand is at risk of a relapse.
There is “significant uncertainty given rising lockdowns,” warned Clarksons Platou Securities in its shipping outlook this week.
Craig Stevenson, CEO of tanker owner Diamond S Shipping (NYSE: DSSI), said during a conference call on Monday, “Almost all the answers that [shipping] shareholders and analysts want come down to: When are you going to get on the other side of COVID? Because until you get a handle on COVID, it’s very, very difficult to predict what markets are doing to do.”
Lockdowns and shutdowns
Nationwide restrictions are in place in France, Germany, the U.K., Poland and much of Europe. Italy and Spain have regional lockdowns.
In the U.S., business restrictions are increasing by the day. They range from bans on indoor dining to capacity limitations at retail stores and closures of theaters and gyms.
According to Evercore ISI head of economic research Ed Hyman, the COVID crisis is “really grim and set to get worse. … cases and fatalities have blown through our estimates and no doubt are headed higher.
View entirety: Freightwaves