Even without COVID-19, the outlook for 2020 in the dry bulk sector was not good. However, same significantly exacerbated the crash in freight rates and transport volumes. From mid-2020, however, the tide began to turn, leading to the impressive results described below. Some of the leading shipping nations seem to have overcome the impact of the COVID-19 pandemic on their economies sooner than others. This is particularly evident in the development of the most important parameters in the individual shipping sectors as was already shown in the last issue of SSMR focusing on the tanker market.
The renewed increase in demand for almost all basic materials for industrial production, from agricultural raw materials, coal and iron ore to non-ferrous metals and steel scrap, has not only caused world market prices to skyrocket as of mid-2020, but has also driven up transportation costs by more than 50%.
For example, the average weighted earnings for all bulk carriers rose to $22,746/day by the end of March 2021, more than a threefold increase when compared to the start of 2020. This is the highest value in the past ten years.
Meanwhile, the Baltic Dry Index, which measures the cost of shipping commodities such as grain, iron ore, cement, coal and fertilizer, has also risen to one of the highest levels in the past decade, initially led by midsize and smaller ships between Panamax and Handysize class.
Analysts expect this trend to continue into next year, as only a few ships were ordered in 2020 and at the same time the scrapping rate was twice as high as in 2019, leading to an overall shortage of shipping space and thus to high transport prices, which is aggravated by sharply rising fuel prices.
The ISL SSMR 2021-3 highlights various developments across the major dry bulk markets and is available via our Webshop.
https://www.isl.org/en/news/20202021-dry-bulk-traffic-development-ore-export-ports-back-track
2021/5/24 9:40:28