The ongoing tariffs on U.S. grain exports to China are likely to push China to seek alternative suppliers, such as Brazil and other South American countries, for its agricultural needs, according to Breakwave Advisors.
Oil Market Dynamics
In the energy sector, following the 2024 U.S. election, a second Trump administration may prioritize efforts to mediate or end the Russia-Ukraine conflict to stabilize global energy prices, which has faced supply disruptions due to the war. Trump’s foreign policy approach could encourage European leaders to resume imports of Russian crude oil, potentially if a peace agreement is reached.
The reentry of Russian oil into the European market would likely lower energy costs across the region, which would have downstream effects on various sectors, including manufacturing and logistics. In image 2, we can view the monthly quantity of crude oil flows from Saudi Arabia to China compared to the monthly quantity of tonnes from Russia to China, where it seems that although China is still purchasing from Russia, the Saudi Arabian has not yet lost its dominant position to cater the Chinese energy demand market.
Dry Bulk Freight Market
If U.S. grain exports shift to new markets in Southeast Asia and Africa, dry bulk demand could grow along these routes, increasing freight rates for bulk grain transport. Additionally, easing tensions in the Russia-Ukraine conflict and realigned European energy sourcing could lead to shifts in bulk shipping for coal, crude, and other materials, potentially lowering rates on certain routes as stability returns to the global supply chain.
Increased agricultural trade between Brazil and China may raise demand for dry bulk carriers on Brazil-Asia routes, potentially boosting freight rates. As the dry bulk market adjusts to new trade patterns and energy demands, fleet allocation and capacity management will be crucial for shipping companies aiming to capture emerging opportunities amid geopolitical changes.
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Source: Breakwave Advisors
