Page 5 - LatAmOil Week 34
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LatAmOil                                     COMMENTARY                                            LatAmOil


                         “The two historic milestones this week – our   In May, a total of 937 ships transited the
                         10,000th Neopanamax transit and 106th anni-  canal, while a further 260 transits were can-
                         versary – are symbolic,” stated Panama Canal   celled according to Vasquez – a 21% decline on
                         administrator Ricaurte Vasquez. “Together,   expected numbers. Nearly half of the cancella-
                         they reiterate that the Panama Canal is not   tions came from LNG and LPG tankers, and the
                         only a trusted and reliable service, but also one   Panama Canal Authority also reported a loss
                         committed to continued competitiveness and   of cruise ship traffic that normally peaks in the   “
                         growth.”                             spring.                                The Panama

                         Taking a hit                         What next?                            Canal Authority
                         Despite the role the Panama Canal plays, traffic   Transits through the Panama Canal are now on   is trying to
                         on the waterway had already taken a hit prior   the up, however, as global trade rebounds from
                         to the coronavirus (COVID-19) pandemic as   the worst of the global lockdowns. In June, total   encourage the
                         a result of the trade war between the US and   transits through the waterway had fallen to 845 –
                         China. In 2019, China’s imports from the US   the lowest level since the expanded canal opened   rebound in
                         dropped by 20.9% year on year to $122.7bn.  – but in July, transits rose to 933 in July.
                           LNG was among the segments hit, with no   The Panama Canal Authority is trying to  transit and trade
                         US exports of the fuel to China at all between   encourage this rebound. It announced recently
                         March 2019 and February 2020. However, fol-  that it had decided to increase the maximum
                         lowing a preliminary trade deal agreed between   authorised draft for the transit of the Neopana-
                         the two countries in January 2020, China started   max locks by 1 foot (0.3 metres) to 48 feet (14.6
                         granting tariff waivers to some of its LNG   metres).
                         importers for cargoes from the US as the coun-  It noted, however, that the draft was depend-
                         try worked to meet its target for importing more   ent on water levels in Gatun Lake, and that ves-
                         US energy.                           sels may be required to offload some of their
                           These efforts to boost US-China trade were   cargo or take other measures to decrease their
                         hampered by the Asian country’s lockdown in   draft to transit the locks.
                         response to COVID-19, though, and China   Speaking to Bloomberg this week, Panama
                         remains significantly behind its target for ramp-  Canal Authority deputy administrator Ilya
                         ing up US energy purchases. But despite doubts   Espino de Marotta warned that LNG and cruise
                         over the trade deal’s ability to survive an upcom-  ship transits may be slower to rebound than
                         ing review, the SK Resolute’s current journey   other types of traffic, such as container ships.
                         shows that US LNG trade with China continues   Indeed, it has been a slow summer for US
                         for now.                             LNG, and a number of contracted cargoes have
                           More recently, as other countries brought in   been cancelled. But these are now recovering,
                         their own lockdowns in an effort to contain the   which is likely to translate into higher LNG
                         spread of COVID-19, traffic through the Pan-  tanker traffic through the Panama Canal in the
                         ama Canal took a further hit.        coming weeks. ™






































                                                       Map of the Panama Canal (Image: OpenStreetMap and contributors)



       Week 34   27•August•2020                 www. NEWSBASE .com                                              P5
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