The week in charts: Tariff turbulence poised to reshuffle VLGC | Retaliatory tariffs could spark inflationary trade shift | What the IMO levy rollback means
Lloyd’s List’s weekly showing of the data and figures behind our news, analysis and markets coverage
VLGCs most likely to experience shift in trade patterns following China’s imposition of reciprocal 34% tariff; Retaliatory tariffs against the US will affect cargo volumes more than US tariffs themselves; IMO green talks look headed toward a fuel standard with a revenue-raising feature
THE very large gas carrier market is known for its volatility — and it is poised to get more volatile, wrote senior maritime reporter Tomer Raanan.
China’s announcement of a 34% levy on US imports in response to the “Liberation Day” tariff extravaganza in the White House is expected to materially impact VLGCs, with a reshuffling of trade routes very much on the cards.
According to data from commodities analytics provider Vortexa, almost 27% of LPG cargoes loaded in the US in 2024 were discharged in China. That figure swells to nearly 33% when looking exclusively at cargoes carried on VLGCs. For China, the US accounted for about 60% of all LPG imports last year, nearly all of which was carried on VLGCs. US-origin ethane, which is shipped on board very large ethane carriers that can also carry LPG, accounted for virtually all of China’s ethane imports in 2024.
US ‘Liberation Day’ tariffs
The immediate fallout from the US “Liberation Day” tariffs, if fully implemented, will be felt first in the container sector. But the likely reduction in underlying oil demand growth and the inflationary impact on bulk commodities being targeted should not be overlooked as an unintended consequence, wrote editor-in-chief Richard Meade.
While US President Donald Trump said he was open to reducing his tariffs if other nations were able to offer something “phenomenal”, even those economists nominally supportive of the US tariff plan accept that they will end up being inflationary. But to what extent is unclear.
Examining the US influence on global trade by individual commodities offers a starting point to understanding the likely consequences of a spiralling trade war.
Where the US is exporting more than 10% of a global commodity market, the inflationary impact of countries ultimately sourcing away from the US as retaliatory tariffs escalate, is going to be a pain point that economists will keep a close eye on.
A breakdown of the US percentage of trade in the world, split by the different commodities courtesy of data consultancy Tradeviews, offers an instructive view.
Maize, for example is a trade where the US has a 31% share of global exports. In the petcoke trade, used for various industrial processes, it has a 53% share.
Sorghum, a grain used for food, animal feed, and ethanol production, tends to go to China, and the US exports 5m tonnes of the 10m tonne global trade. Should that become a commodity where importers source away from the US, that will create an inflationary effect.
IMO’s greenhouse gas fuel standard
A global emissions regulation based on a greenhouse gas fuel standard is going to be hard for shipping companies to live with, experts warn, wrote senior reporter Declan Bush.
Talks at the International Maritime Organization last week saw momentum swing in favour of a credit trading plan nicknamed J9.
The final detail of how it will work won’t be known until October, when the IMO adopts its package of mid-term climate measures.
Feeders still dominate boxship charter market
The boxship charter market continues to defy container freight markets with no sign of a downturn in demand for chartered tonnage during a period of high geopolitical tensions, looming US tariffs and port levy threats, reported markets editor Rob Willmington.
For the first time since January, the Shanghai Container Freight Index recorded minor gains, rising 4.9% week on week. This was chiefly due to rising freight rates on the Shanghai-US routes but the overall index remains depressed since the start of the year. Conversely, the charter market has remained resilient during the same period.
Tariff impact on dry bulk limited, but worse could be to come
The worst could be yet to come for the dry bulk sector as far as tariffs are concerned, wrote reporter Joshua Minchin.
Cement is a major commodity immediately affected by president Trump’s “Liberation Day” announcement. Howe Robinson head of dry bulk research Bilal Muftuoglu said US imports from Vietnam (a major cement exporter) would be heavily affected.
Instead, Drewry director of dry bulk research Rahul Sharan expects US buyers to switch to Türkiye, its largest cement trade partner. With a tariff of 10% on Turkish cement versus 46% on Vietnamese imports, this would be the shrewdest move for importers.
US grain and coal will likely be the biggest losers as far as commodities go, MSI director Will Fray told Lloyd’s List.
Fray said coal trade routes will likely be reshuffled, with the inefficiencies that result potentially a positive for shipping, providing volumes are not affected too much.
But the same can’t be said for grain, and in particular US soyabeans, which are heavily reliant on China as an importer.
