Dry bulk vessel congestion is building in the port of Shanghai, China, as over 120 dry bulkers are sitting just offshore from the city locked down by government's strict zero Covid-19 policy.
Over 30 Capesizes, 30 Panamaxes, and 60 geared vessels are clustered a few miles off the coast of the port city, each waiting for its turn to dock in the Yangtze River alongside more than 30 tankers.
March 2022 was the first time that two leading Chinese economic indices simultaneously contracted since the country's response to the initial wave of Covid-19 in February 2020, according to a shipbroker.
China's "closed loop" quarantine system may be utilized by Shanghai soon to increase production of manufactured goods. Whether this will help to expedite vessel loading and unloading remains to be seen.
Chinese demand for iron ore and coal has "severely lessened" so far this year compared to 2021, according to a ship broker. This drop in demand may negate the upward pressure on freight rates that restrictions to vessel supply in the region may otherwise have caused, as seen previously in mid-2021 when major port delays contributed to large spikes in Capesize and Panamax rates.
