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Dry bulk shipping hit by Chinese slowdown

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World Coal,

A 38% drop in Chinese coal exports in the first four months of the year has hit the dry bulk shipping market, despite high rates of demolition and a sharp rise in Indian coal imports, according to the latest market review from BIMCO.

“It is small consolation that Indian coal imports may go up by 20 million t, when Chinese imports drop by 30 million t for the second year running,” said the report.

The Baltic Dry Index (BDI), which provides a daily assessment of shipping rates, bottomed out at 509 in February after starting the year at 771. Despite some recovery since then, it remains at historically low levels and only a couple of occasions has it been about 600.

“The momentous imbalance between supply and demand continues to worsen in spite of a noteworthy 10 yr low supply growth rate,” said BIMCO. “As the demand growth for dry bulk seaborne transportation seems to weaken too, potentially even on a permanent basis as China changes gear, the industry must adapt to become profitable again. Wait-and-see strategies may turn out to take too long.”

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