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Affinity Policy Comment 15 July 2024

Give the People What They Want

As far as weekends go, there are few more surreal and disappointing in recent memory. Beside the bitter disappointment of the football last night, the horrifying events in Butler, Pennsylvania on Saturday will probably set off a chain of events that will shape the next five years.

Whatever you may think of Donald Trump, what unfolded on Saturday was tragic. But that picture of him, emerging among the throng of his Secret Service agents with his fist raised, blood on his cheeks, will define the election. Even if Biden steps down and is replaced with a more unifying democratic candidate, it won’t make a difference. Trump’s election for a second term is all but guaranteed.

American politics has arguably never been divisive. Both Biden and Trump have since called for calm, but Republicans have pounced on the assassination attempt, claiming that Biden himself is directly responsible. At a donor event prior to the shooting, Biden said, “We’re done talking about the debate, it’s time to put Trump in a bullseye.”

Mike Collins, a Republican member of the House of Representatives, seized on this, claiming, “Joe Biden sent the orders.”

American politics somehow contrives to plumb new depths with every passing week.

And we are still four months away from the elections themselves, with every change that it will get worse from here. America is on the brink but, we must now prepare for five years of a volatile and wildly unpredictable Trump presidency.

Markets on Monday reacted accordingly. US Treasury yields and the US dollar climbed in a similar manner to how they reacted to Biden’s disastrous debate performance – a Trump victory is expected to result in tax cuts, which would drive up both deficits and inflation, hitting US Treasuries and boosting the US dollar. It is what happened after he won in 2016.

The US dollar index climbed 0.2 per cent, reversing a month of weakness so far, while even Bitcoin surged, benefitting from previous acts and statements from Trump that suggests he is pro-cryptocurrency.

No one can know for certain what he would do should Trump return to the White House (does he even know?), but protectionist policies and trade wars are pretty much a given at this point.

China will undoubtedly be revelling in the US’s political breaking point, but it has its own issues closer to home. In Q2, the Chinese economy grew by only 4.7 per cent, tumbling from Q1’s 5.3 per cent growth rate and falling comfortably short of forecasts of 5.1 per cent. That the data was released as the Chinese Community party’s Central Committee launched its third plenum to set the direction of economic policy is fitting. The last of such meetings was held six years ago, and the disappointing economic data may be the jolt required to provoke significant economic stimulus.

President Xi will be further concerned by the impact the slowing economy is having on the wider Chinese population. Authorities are growing increasingly worried about rising unemployment, mental illness and crime, while there is a growing awareness of the rich-poor divide. Consumer spending, one of the supposed new “pillars” of Chinese growth, continues to underwhelm. Retail sales rose by just 2 per cent in June, falling well short of forecasts.

Production, rather than demand, is supporting the Chinese economy, as the wider population struggles to adapt to the shift in economic policy.

According to US-based think-tank Freedom House, there were 655 “dissent events” in Q1, a 21 per cent increase compared to the same period last year. Beijing does not publish reliable official figures on protests.

After July 2023, the National Bureau of Statistics temporarily stopped reporting youth unemployment for those aged between 16 – 24 years old, after it hit a record 21.3 per cent. It resumed a few months later with a “new methodology”, with a figure of 14.2 per cent in May this year, after students were removed.

But not all news is bad. Industrial production in June grew by 5.3 per cent, surpassing expectations, while fixed asset investment increased by 3.9 per cent through H1 2024.

Will Beijing now finally look to address unemployment and waning domestic demand? The plenum ends on Thursday.


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  • Carbon

    Carbon

    Using tailored analytics platforms, we offer client-specific advisory and trading services across the global carbon markets. Contributing to hedging strategies, sustainability reporting and financing requirements, our aim is to assist clients in managing their financial exposure to the approaching energy transition.

    Contact: Hugo Wilson
    [email protected]
    +44(0)20 3142 0121

    Dry Cargo

    Dry Cargo

    Our dry bulk chartering teams in Sydney, Melbourne, Perth, Santiago, Lima, Montevideo, Buenos Aires, Singapore and London are cargo-focussed and they fix voyage, COA and time charter business on behalf of their clients with a wide range of ship owners.
    For Atlantic business please contact Hans Bredrup
    For Pacific business please contact Rahul Khanna

    Contact: Hans Bredrup
    [email protected]
    Contact: Rahul Khanna
    [email protected]

    LNG

    LNG

    Our young and dynamic LNG team possess wide-ranging experience of spot and term charters working with all major LNG shipowners and charterers. The LNG team has close interaction with the Newbuilding and Sale & Purchase divisions with an unrivalled track record of contracting LNG newbuildings and in the sale and purchase of LNG assets.
    We maintain up-to-date knowledge and an understanding of new technologies within the LNG sector to ensure that our clients can make the most suitable and cost-effective decisions on shipping solutions.

    Contact: Joni Mackay
    [email protected]
    +44(0)20 3142 0133

    Newbuilding

    Newbuilding

    Our Newbuilding team has concluded over 500 newbuildings of all types, including LNGCs, FSRUs, drillships, crude tankers, product tankers and dry cargo vessels. We have contracted in all major newbuilding centres globally, with particular focus on the Korean Shipyards.

    Contact: Nick Wood
    [email protected]
    +44(0)20 3142 0111

    Offshore

    Offshore

    Affinity Offshore is based out of our Oslo and Houston offices. The Team focuses on world-wide sale & purchase of offshore support vessels, as well as chartering – particularly in the Americas and Mediterranean/MENA regions.

    Contact: Tor-Øyvind Bjørkli
    [email protected]

    Research

    Research

    Our research department combines real time market information with econometric modelling and the latest technology. 

    Contact: Sevita Kondyliou
    [email protected]
    +44(0)20 3142 0182

    S & P

    S & P

    Our Sale & Purchase team has extensive experience of working with private clients, national shipping companies, major corporates, oil companies, grain houses and institutional investors. We provide a cradle to grave services across all shipping sectors. We operate from London, Singapore and Seoul to give 24-hour coverage of the markets, working for both newbuilding and second-hand buyers.

    Contact: Tom Morrison
    [email protected]
    +44(0) 20 3142 0128

    Tankers

    Tankers

    Our established tanker chartering teams serve the industry from London, Houston and Santiago delivering a highly proficient spot chartering service with a prime position in the fuel oil market. The team has close relationships with oil majors, national oil companies, oil traders and major ship owners and operators. 
    Our ethos for operations and post-fixture is simple: these roles are as important to us as the chartering/commercial function, and we continue to apply those same principles of professional ship broking throughout the life of each fixture.

    Contact: Tim Gurdon
    [email protected]
    +44(0)20 3142 0142

    Valuations

    Valuations

    We provide transparent, objective ship valuation service to major owners, banks and other financial institutions at short notice and a daily basis. We provide a retainer service for regular fleet valuations.

    Affinity Valuations Limited Terms of Business

    Contact: Stuart Morrison
    [email protected]
    +44 (0)20 3142 0144

    Carbon

    Using tailored analytics platforms, we offer client-specific advisory and trading services across the global carbon markets. Contributing to hedging strategies, sustainability reporting and financing requirements, our aim is to assist clients in managing their financial exposure to the approaching energy transition.

    Contact: Hugo Wilson
    [email protected]
    +44(0)20 3142 0121

    Dry Cargo

    Our dry bulk chartering teams in Sydney, Melbourne, Perth, Santiago, Lima, Montevideo, Buenos Aires, Singapore and London are cargo-focussed and they fix voyage, COA and time charter business on behalf of their clients with a wide range of ship owners.
    For Atlantic business please contact Hans Bredrup
    For Pacific business please contact Rahul Khanna

    Contact: Hans Bredrup
    [email protected]
    +56 99 887 3036
    Contact: Rahul Khanna
    [email protected]

    LNG

    Our young and dynamic LNG team possess wide-ranging experience of spot and term charters working with all major LNG shipowners and charterers. The LNG team has close interaction with the Newbuilding and Sale & Purchase divisions with an unrivalled track record of contracting LNG newbuildings and in the sale and purchase of LNG assets.
    We maintain up-to-date knowledge and an understanding of new technologies within the LNG sector to ensure that our clients can make the most suitable and cost-effective decisions on shipping solutions.

    Contact: Joni Mackay
    [email protected]
    +44(0)20 3142 0133

    Newbuilding

    Our Newbuilding team has concluded over 500 newbuildings of all types, including LNGCs, FSRUs, drillships, crude tankers, product tankers and dry cargo vessels. We have contracted in all major newbuilding centres globally, with particular focus on the Korean Shipyards.

    Contact: Nick Wood
    [email protected]
    +44(0)20 3142 0111

    Offshore

    Affinity Offshore is based out of our Oslo and Houston offices. The Team focuses on world-wide sale & purchase of offshore support vessels, as well as chartering – particularly in the Americas and Mediterranean/MENA regions.

    Contact: Tor-Øyvind Bjørkli
    [email protected]

    Research

    Our research department combines real time market information with econometric modelling and the latest technology. 

    Contact: Sevita Kondyliou
    [email protected]
    +44(0)20 3142 0182

    S & P

    Our Sale & Purchase team has extensive experience of working with private clients, national shipping companies, major corporates, oil companies, grain houses and institutional investors. We provide a cradle to grave services across all shipping sectors. We operate from London, Singapore and Seoul to give 24-hour coverage of the markets, working for both newbuilding and second-hand buyers.

    Contact: Tom Morrison
    [email protected]
    +44(0) 20 3142 0128

    Tankers

    Our established tanker chartering teams serve the industry from London, Houston and Santiago delivering a highly proficient spot chartering service with a prime position in the fuel oil market. The team has close relationships with oil majors, national oil companies, oil traders and major ship owners and operators. 
    Our ethos for operations and post-fixture is simple: these roles are as important to us as the chartering/commercial function, and we continue to apply those same principles of professional ship broking throughout the life of each fixture.

    Contact: Tim Gurdon
    [email protected]
    +44(0)20 3142 0142

    Valuations

    We provide transparent, objective ship valuation service to major owners, banks and other financial institutions at short notice and a daily basis. We provide a retainer service for regular fleet valuations.

    Affinity Valuations Limited Terms of Business

    Contact: Stuart Morrison
    [email protected]
    +44 (0)20 3142 0144

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