Monkeying around

Malcolm Latarche
Malcolm Latarche

01 February 2016


After what may have been the worst start to a New Year in living memory, shipowners may be hoping that the passing of January will bring a change in their fortunes. January has been notable for the slide in Chinese stock markets and a slowdown in expectations for trade with what has become the engine of the world economy. The result has been a string of record lows for the Baltic Dry Index and shrinking volumes of containers moving. It will be hard to judge if there will be much to give optimism for the rest of the year for a few weeks yet because China is approaching the start of the Chinese New Year which takes place a week from today on 8 February. Ever since China applied the accelerator to its economic growth, the New Year period has had a dampening effect on trade as the country and other parts of Asia undergo a virtual shutdown. This year, that may have the reverse effect since a stock market closedown will at least mean that prices do not slide further and the lack of bulk cargo moving has already been taken into effect. This year in the Chinese calendar is the Year of the Monkey – apparently an auspicious sign to be born under but astrology holds little attraction for hard headed shipowners and the fact that this year marks the 50th anniversary of Mao’s Cultural Revolution may be more significant. The Cultural Revolution was Mao’s way of turning back the country’s move away from communism towards ‘bourgeois values’. Parallels can be drawn with events prior to 1966 but it is highly unlikely that history will repeat itself not least because China’s global influence is far stronger in every way now than it was then. So for February at least there may be a period of calm and time to take stock. Oil prices may start an upward path which will increase optimism but there are plenty more events this year that could impact on shipping’s prospects. Iran’s rehabilitation, peace talks in Syria, a possible UK exit from the EU and a US presidential election could all have major effects. We live in exciting and troubling times