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    What the shipping industry looks like 6 months after the Ukraine invasion

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    What the shipping industry looks like 6 months after the Ukraine invasion

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    Tanker earnings are strong for now, with the Russia-Ukraine war firing up demand, G Shivakumar, Executive Director and CFO at GE Shipping, said in a chat with CNBC-TV18, where he spoke about the firm's dry bulk trade and how the global slowdown and the Russian war have affected tanker earnings.

    Tanker earnings are very strong still, in fact, crude tanker rates have become stronger in the last month or so, mainly driven by the Russia-Ukraine war, G. Shivakumar, Executive Director and CFO at GE Shipping, said.

    Shivakumar spoke to CNBC-TV18 about the firm's dry bulk trade, global slowdown and its impact on tanker earnings and the impact of the Russia-Ukraine war.

    In the last few months, the crude tanker rates have become stronger, said Shivakumar. "The larger crude tankers are doing very well for the last month to a month-and-a-half. The smaller crude tankers were doing well since April, May. And now you've got the larger ships also joining in the party," he said.

    Talking about the firm's dry bulk business, Shivakumar said it is still witnessing demand pressure. "On the dry bulk side, the demand pressures are showing. The trend is actually down probably 1-2 percent this year. We had the market kept up by congestion and that was tying up ships, basically COVID-related disruptions. We've seen congestion dropping by 5 percent in the last month-and-a-half. As a result, the big ships have dropped a lot. So capsize bulk carriers have dropped. Now the spot rate is around $3,000 a day versus the high in the last 12 months

    Shivakumar said that smaller ships are less affected by price volatility. "The big ships are really affected by steel and coal demand. The smaller ships are less affected," he said. However, he added that tanker rates are compensating for the drop in bulk rates. 

    Shivakumar added that the market scenario is still very uncertain. "We don't know how the market is going to play out. Demand is actually lower on the oil consumption side, it's not yet come back even to the 2019 pre-COVID levels," he said, adding that despite that rates are really strong because of the disruptions. "So, it's tough to make a call for this. All we can say is that the first six months of this year for tankers are much stronger than the first six months of last year. And I'm talking of 2x to 3x in terms of rates,” he said.

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