Latin America Market Update August 2022

Download Latin America Market Update - August 2022 (PDF, 717 kB)

Topic of the month​

The Green future – Mining and Clean Energy Perspectives:

Whether you are enthusiastic or not, no one can deny that the future tends to be greener! Governments and companies are racing against time to meet the Paris agreement targets for carbon emissions reductions so we can guarantee that the world will limit the average temperature increase to 1.5°C on earth and that the net carbon emissions will be zero until 2050. During this topic of the month, we will bring you an interesting perspective on the relationship between green energy transition, the price increase in the energy-transition-minerals and the role of the carbon-intensive mining industry in this transformation. ​

As the greener economy becomes a more relevant theme, it is important to question ourselves. Do we already have what it takes for a greener transition? From where are all the minerals coming that will support this revolution? Do we have enough capacity to supply all the demand required to produce wind turbines, batteries for electric and hybrid cars and solar panels? And after that, what will be the impact of this production? ​

According to the International Energy Association (IEA), energy technologies based on wind and solar are much more intensive on the usage of minerals like copper and zinc. Also, when we compare it to the average car, the number of minerals used in an electric vehicle can be six times higher than a conventional one. The variety of minerals used is also much wider. ​

IEA says that by 2040 the amount of Zinc usage just related to energy transition will be the same demanded from zinc by all industries in 2020. The total mineral demand coming from green initiatives might increase 2 to 4 times by 2040. These examples show how intensive the usage will be and how much more minerals will need to be extracted so when can move forward to a greener world.

Some of Latin America countries are well positioned in this new era. According to US Geological Survey, Chile has not only the biggest reserves of copper in the world but also Lithium, a key mineral used in batteries, Argentina is in 3rd. According to Benchmark Mineral Intelligence the price of Lithium only in 2022 increase around 119% year to year. This scenario of price pressure might not ease in the near future as a combination of rising demand plus a lower capability to increase supply, as opening new mines and make it operational might take several years. ​

According to a McKinsey article called “Creating the zero-carbon mine,” mining emissions from the supply chain and transportation are responsible for between 15% to 30% of the sector`s total emissions. The increase on demand for minerals related to clean energy transition is putting additional pressure on the mining sector to reduce the net emissions CO₂. Companies that do not embrace ESG (Environment, social, and governance) initiatives might also have more difficulty finding credit or will need to pay a higher cost for that. ​

If you want to understand how AP Moller Maersk can support your business to redefine its logistic experience and be part of a more sustainable future, you can find more information about our Green Solutions here .

Major Trade Lane Market Overview

WCSA to Asia Scrap metal prices are expected to drop, which could affect exports in the coming months. Global copper prices dropped, but exports remain strong. Mining segments ex Mexico continue to perform well. Mexican avocado peak season to start in Sep/Oct Stable
Asia to WCSA Although volumes are healthy, recently introduced capacity has resulted in a softer market with market utilization averaging 90% across carriers with no backlogs and important rate decreases on the short-term approach. The long-term segment is observed unstable with short term rates now reaching long term contracts levels into LAM across carriers. Main risks to consider additionally to the Zero-Tolerance Covid policy in China, is the available capacity deployed for August and September ahead of Golden Week in October. Stable
Europe to WCSA Volumes remain stable and expecting that European summer holidays have a medium impact as of August. Ukraine/Russia conflict volume is mostly recovered as demand from the Mediterranean is very healthy and North Europe volumes are steady; highest risk across markets lies in sailings from Germany with union strikes affecting Hamburg and Bremerhaven ports operations, mainly. Stable
WCA to WCSA With European and US markets changes, more space has become available for short term demand; expecting that this region enters their peak season in August, outlook remains positive from both India and Middle East into the Americas while the long-term contracts continue doing well. Stable
Asia to ECSA Since some carriers have deployed additional capacity for August while demand for Q3 is expected to stay strong, rates may observe fluctuations on the spot market. The long-term segment is also doing well, yet one main risk is demand from Argentina as economic situation deteriorates. Another latent risk is China's Zero-Tolerance covid policy, along with changes in the available capacity deployed for August and September ahead of Golden Week in October. Increasing
Europe to ECSA The Mediterranean market continues strong and steady with minimal impact from the summer holidays effect on August loadings. North Europe is under pressure from Germany strikes affecting operations in Hamburg and Bremerhaven ports, mainly. Additionally, industrial sectors continue to signal impact on their supply chains from the Ukraine/Russia conflict. Stable
WCA to ECSA With European and US markets changes, more space has become available for short term demand; expecting that this region enters their peak season in August, outlook remains positive from both India and Middle East into the Americas while the long-term contracts continue doing well. Stable
East Coast to Asia Overall demand continues to be driven by protein related products into Asia (mostly China). Cotton crop is gradually ramping up now in August towards the peak season which is expected to take place in Q4.Extra capacity deployed in the market to cover the booming demand on the imports may also impact the supply & demand export wise. Stable
East Coast to Europe Demand for main commodities such as coffee, grains, tobacco and paper remains stable. Citrus season out of River Plate starts to phase out in August.A combination of port congestion and strike actions in some European ports as well as the bad weather in East Coast of South America are hampering the ability to bring vessels back to schedule. Stable
West Coast to Europe Fresh Fruit market remain unstable: Competition adjusting rates jeopardizing contract fulfillment. Excess Fruit delayed due to weather conditions. Instable

Main port status

Key ports across our global network remain stressed mainly due to shortage of labor and weather impact.

In Northern Europe , Situation in Bremerhaven remains with experienced waiting time of 3 days due to busy line-up and yard congestions.

In Asia, the situation has improved in Ningbo with experienced waiting time from 4 to 2 days, same as Yantian.

In Latin America, the situation related weather disruption is more stable in the Gulf Of Mexico however in Chile we can see the deterioration in line up as consequence of often port closures, due to strong winds and high swells. Same being experienced in South America , due to weather disruption , experienced waiting time can be of 1 day in Itapoa and Paranagua.

In North America, West Coast the situation has not much changed with very high experienced waiting time. Oakland and Los Angeles are the critical ports with experienced waiting time up to 16 days. For the Canadian ports, Vancouver remains deteriorating and waiting time experienced can be up to 55 days.

Vessel Arrival Waiting Time Indicator

  Less than 1 day 1-3 days 3-7 days
Latin America SSA/ Manzanillo, Lazaro Cardenas, Veracruz, Altamira, Moin, hubs (Balboa, MIT, PSA, Cristobal and Cartagena ), Buenaventura, Callao, Guayaquil, Valparaiso, San Antonio (Chile), Santos, Paranagua, Itajai, Buenos Aires, Montevideo. Itapoa, Paranagua  
Rest of the world Vietnam, Singapore, Malaysia, Norfolk, Charleston, North Charleston, Jacksonville, Port Everglades, Tampa Philadelphia, Seattle, Miami, Freeport, Newark APMT, Baltimore, New Orleans, Mobile, Antwerp, London, Hamburg, Qingdao, Hong Kong, Busan, Ningbo, Yantian, Shangai, Tauranga, Prince Rupert (*) Rotterdam, Bremerhaven(*), Vancouver, Long Beach, Los Angeles, Savannah, Oakland, , Newark PNCT, Houston (*)
(*) - cargo connections can be impacted considering the delays reported

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Download Latin America Market Update - August 2022 (PDF, 717 kB)

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