Seasonal cycles are well known in shipping and may arise from seasonal effects on the
supply or demand side of the commodity market. An example of a supply-driven seasonal
cycle is the summer lull in the bulk carrier market caused by the slow down of
grain exports from the USA in
July and August. This is when the
US grain harvest takes place and
by this time shipments from the
previous season have usually run
down but the new season shipments
have not yet started. An
example of seasonality in commodity
demand is the cycle in
world oil demand which results in
lower trade in the second quarter
of the year and higher trade as
stocks are built up for the
Northern Hemisphere winter in
the fourth quarter. This is shown
in Figure 10.6, which plots quarterly
oil demand. These seasonal
fluctuations are generally more
noticeable when the oil market
is just in balance and less apparent
when it is very tight or in
surplus.