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In a notable development for global trade...

In a notable development for global trade, the United States and China have agreed to temporarily ease a selection of tariffs and sanctions, marking a significant de-escalation in their ongoing trade tensions. Under the agreement, the U.S. has reduced tariffs on Chinese imports from 145% to 30% for a 90-day window, while China has lowered its tariffs on U.S. goods from 125% to 10%. This move has already had a measurable impact on the shipping industry, with a surge in freight volumes expected as businesses accelerate shipments to take advantage of the tariff reprieve. Companies are racing to import goods ahead of any potential reimplementation of higher duties. Shipping firms, including ZIM Integrated Shipping Services Ltd (ZIM), have reported increased demand, with their stock performance reflecting renewed market confidence. However, despite the short-term boost, the temporary nature of these tariff reductions has injected a degree of uncertainty into the sector. Industry players remain cautiously optimistic, recognizing that the core issues underpinning U.S.–China trade tensions remain unresolved. Moreover, analysts have raised concerns about potential supply chain congestion due to the sudden spike in cargo movement, drawing parallels to the disruptions experienced during the COVID-19 pandemic. While the tariff reductions offer immediate relief and stimulate shipping activity, the long-term outlook hinges on the durability of this truce and the broader geopolitical environment.

In line with Trump-era policies, the US and Iran are reportedly close to reaching a potential nuclear agreement, aimed at limiting Iran's nuclear program. President Trump recently indicated that the two nations have "sort of" agreed on key terms. Such a breakthrough in US-Iran relations could have far-reaching consequences for the shipping industry. The easing or lifting of sanctions on Iran could potentially trigger a substantial rise in Iranian oil exports, driving up demand for tankers and increasing freight volumes throughout the Middle East. Key maritime hubs in the Arabian Gulf and the strategically vital Strait of Hormuz could experience a surge in activity as Iranian crude and oil products gain greater access to international markets. Presently, the average age of vessels in the National Iranian Tanker Company fleet stands at 17 years, while the Islamic Republic of Iran Shipping Lines operates ships averaging around 18 years old. A successful deal may accelerates ship demolition activity of older dark fleet ships, paving the way for much-needed modernization of Iran's aging maritime fleet. Apart from Iran's fleet, this would also reduce demand for the aging dark fleet vessels transporting Iranian crude covertly. Without sanctioned cargoes, many of these older ships would likely head for scrap, shrinking the active tanker fleet and improving overall market conditions by lowering excess supply and increasing fleet quality.

Meanwhile, in another effort to stabilize maritime trade and restore confidence along key routes, Egypt's Suez Canal Authority has introduced a 15% discount on transit fees for container ships with a net tonnage of 130,000 metric tons or more. Effective from May 15, 2025, the 90-day incentive applies to both laden and empty vessels transiting in either direction and will be automatically granted, requiring no prior application. The move is aimed at attracting major shipping lines back to the Suez Canal, which has experienced a sharp decline in traffic due to Houthi rebel attacks in the region. As a result, many carriers have diverted their routes around the Cape of Good Hope, contributing to a steep drop in canal revenues—from $2.4 billion in Q4 2023 to just $880.9 million in the same quarter of 2024.

S&P activity:

Dry:

The Newcastlemax and Capesize sectors were notably active this week. HMM acquired the Scrubber fitted Newcastlemax "Luise Oldendorff"- 208K/2015 HHI for USD 51 mills. The Scrubber fitted & Electronic M/E Capesize "Thalassini Agatha" - 182K/2011 Universal was sold for USD 28.8 mills to Singaporean based buyers. Moreover, the "Tradership"- 177K/2006 Namura found new owners for USD 18.5-19 mills, while the Mini-Cape "Brilliant Jupiter" - 119K/2010 Sanoyas changed hands for USD 16 mills. The Kamsarmax/Panamax sector also saw solid activity, recording four sales. The Scrubber fitted Kamsarmax "Medi Nagoya" - 82K/2018 Tsuneishi Cebu was sold for excess USD 28 mills to Vietnamese buyers. The Kamsarmax "Thunderbird"- 79.5K/2011 Jiangsu Eastern and the "Bonneville" - 79K/2010 Jiangsu Eastern were sold enbloc for mid/high USD 19 mills, while Chinese buyers acquired the Panamax "Ivestos 5" - 77K/2005 Sasebo for USD 9 mills. Finally, the OHBS Handysize "Amstel Confidence" - 39K/2011 Minaminippon was sold for low USD 14 mills.

Tanker:

In the tanker S&P market, the Suezmax sector was particularly active. Nigeria based buyers acquired the "Cascade Spirit" - 157K/2009 Jiangsu Rongsheng and the "Aspen Spirit"- 157K/2008 Jiangsu Rongsheng for USD 75 mills enbloc. On the same sector, the Scrubber fitted "Advantage Solar"- 157K/2009 Jiangsu Rongsheng was sold for USD 36.4 mills to Chinese buyers. Additionally, the "Nordic Castor" - 150K/2004 Universal found new owners for USD 22.5 mills. On the MR2 sector, the "Seaways Frontier"- 50K/2007 HMD and the "Seaways Citron" - 50K/2007 HMD were sold for USD 14 mills each.

Xclusiv Shipbrokers Inc.