00:00You have ships that bring back, in one fell swoop, 55,000 metric tons of copper from Chile.
00:08Are those in strong demand right now?
00:12Copper in general is in strong demand.
00:15And yeah, there's about a million tons that are imported a year from Chile into the U.S.
00:22And I will say it was a little surprising to see a tariff put on copper.
00:29But when you start to think about it a little bit more, 25% of what the U.S. uses is actually produced here.
00:37And there is a brand new mine that is sponsored by Rio Tinto in Arizona that just got regulatory approval.
00:45So you have to wonder if there are some other pieces being moved around here.
00:50That is interesting.
00:50But you look at also the amount that we import.
00:54You mentioned Chile.
00:55The other place that Chile exports a lot to is to China.
00:58Yes.
00:58How do these routes change?
01:01How does the equation for trade change if the U.S. is putting a 50% tariff on copper imports and China is not?
01:10Yeah.
01:11So China is really interesting.
01:14They clearly, as you said, they import from Chile.
01:17But they also have mining projects, particularly in the Congo, that are copper focused.
01:24So there are alternative sources for China.
01:27And it's one of the things China has been doing over the last five years in particular.
01:33And that is investing in other mining projects, particularly in West Africa, bauxite, iron ore, and then the copper that I mentioned in the Congo.
01:42These tariffs, you know, both the country tariffs and sectoral tariffs, have they been great for your business because of people pulling demand forward?
01:52There's definitely been demand forward on soybeans, particularly out of Brazil.
01:58And we all know that the Chinese have gotten very close with Brazil going both ways.
02:03But soybeans in particular.
02:06And so what we've seen is U.S. soybeans down 35% for this time of year.
02:13Now, we are not in peak season.
02:15Peak season really starts in September.
02:17And so that will tell the tale.
02:19But I do find it interesting, the last trade negotiations during the previous Trump administration, when they settled with China, they had tons of soybeans and ag products that needed to be moved out of the U.S.
02:35That didn't happen in this negotiation.
02:37As you know, it was more about rare earths than actual agriculture.
02:41So it remains to be seen.
02:43You tend to see things before the broader American public does, just the way that things are being brought in to the country.
02:48Now, where else are you seeing that front loading?
02:52Where do you begin to get worried about inflation, if at all, with certain types of goods?
02:56And where are things slowing down?
02:58Yeah.
02:58Yeah.
02:58So it's interesting.
03:00Not our business, but we obviously follow a lot within shipping.
03:04And if you look at the container rates, there was a lot of front loading into the U.S., China into the U.S.
03:12So those rates were, you know, moved up quite a bit several months ago.
03:16The opposite is happening now.
03:18So container rates, China to the U.S., have actually dropped, but they've increased in Europe.
03:24Some of that has to do with the Red Sea hostilities again.
03:27But it's also because of a lot of the front loading that happened and the scarcity of tonnage available to go to Europe.
03:36We were talking during the break about what's going on in the Red Sea, and there's a lot of very bad stuff happening there.
03:41Crews kidnapped and essentially terrorism, right?
03:47You're avoiding that by going around.
03:51So what does that add to a shipment in terms of cost?
03:55Obviously, it's worth it in terms of safety.
03:58Yeah, look, it probably adds 10 days, and we build it into our freight model and our freight pricing.
04:06It's very upsetting, what's happening now, because I think a lot of people felt that tensions were cooling down.
04:17We haven't put our ships through there since December of 23.
04:22That's when we made the decision not to go through there.
04:24But there have been two very recent attacks on dry bulk vessels, fortunately not ours.
04:30Again, we're not going through there, but it seems to be getting more lethal and more dangerous because we're actually now having crew members, unfortunately, being killed.
04:41And the pride needs to be solved.
04:46What's the answer to that, John?
04:48I mean, we have already launched a ton of attacks on the Houthis, right?
04:52Everybody got to read it in the Signal chat.
04:54But it doesn't seem to have solved the problem.
04:58It doesn't.
04:59I think we need more military assets actually there and patrolling.
05:03You know, we had that situation.
05:05We had a global force when there was piracy off the coast of Somalia.
05:10Indian, Chinese, U.S.
05:12I think we need more of a presence there.
05:15Because what the Houthis will tell you is you can go through.
05:19Just don't call Israel.
05:21If you call Israel, then we're going to come after you.
05:24Now, you mentioned you've been not going through the region since 2023.
05:29And that just goes to say there's been years of geopolitical conflict.
05:32When the broader American public is looking at the news, they're looking at kind of the worst of the worst happening.
05:39But realistically, there has been a lot of bad stuff happening for years to the point you've been making.
05:43So what is the risk geopolitically moving forward?
05:48And perhaps how could that create inflation spikes that are unwanted, right?
05:53It wasn't long ago that we were concerned about the closure of a straight-of-form moose.
05:58For sure.
05:59And I think, look, that probability has dropped significantly, which is good news.
06:05But that doesn't mean it's necessarily gone away.
06:07And we find out, you know, tensions flare, you know, on a weekly basis.
06:13So I think that's a much lower probability now.
06:16But you can't rule it out.
06:19The Red Sea situation is definitely adding to freight costs on the container ship side in particular,
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