Global shipping market reels from coronavirus

China shutdown leaves crews stuck at sea, shipyards deserted and shipowners hunting for work

for use, since US sanctions related to Iran were lifted on a unit of Cosco, China’s largest tanker owner, at the end of January. That potential pressure on transit prices is compounded by a tendency for demand to fall after Chinese new year.

One potential source of comfort for tanker operators is the prospect that the ships could be used as floating storage for oil while land-based storage is running short. Mr Gallagher said he had received some inquiries about this service, but for now, it was not economical to do it.

Other shipping segments have also been slammed by the epidemic. AP Moller-maersk, a major container shipping company, has cancelled 20 sailings out of China since the outbreak began. Some shipowners were not allowing their vessels to sail to China because of the risks, while others were charging a premium for voyages there, one Asia-based broker said.

Optimists in the industry forecast it will bounce back with expected stimulus measures from Beijing once the spread of the virus has successfully been contained. But prolonged economic disruption could ultimately make several industries including shipping reflect on over-reliance upon one country and consider relocating some operations outside of China.

“You have the trade war and then on top of it the coronavirus outbreak,” said Erik Broekhuizen, head of tanker research at Poten & Partners, a broker. “You’ll have people say ‘wait a minute . . . we need a plan B’.”