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The End of Panamanian Pandemonium
Updates to Panama and front-loaded import demand ahead of U.S.-China tariffs
Mobius Intel Brief:
Before enacting drought-related draft restrictions, the Panama Canal oversaw approximately 3% of global maritime trade and 46% of Northeast Asia-U.S. East Coast container shipments.
Record-low water levels forced the Panama Canal Authority to limit vessel transits throughout 2023 and early 2024, ultimately cutting the waterway’s daily cargo and tanker trade by more than 52% and 51%, respectively.
This week, the Panama Canal Authority lifted these draft and transit restrictions as the end of El Niño-related weather restores water levels in the artificial Gatun Lake.
The steady rise in Panama Canal vessel traffic coincides with front-loaded container imports from Asia as importers race to restock inventories ahead of U.S. tariffs and a possible ILA union strike. Global and regional freight rates reflect this concentrated seasonal demand, inviting bearish follow-on effects for 2H24 commodity demand and economic performance.