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Three trends keeping the dry bulk shipping market down

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World Coal,


Low volumes, shorter sailing distances and low scrap rates are holding the bulk shipping market down, according to BIMCO’s latest market analysis reports.

Lower amounts of seaborne traded coal has hit the volume of shipped dry bulks as Chinese imports have fallen by 51 million t in the east and UK imports have dropped by 13 million t in the west. This has only been marginally countered by a 16 million t rise in Indian imports – although prospects here are dimming as well, as higher domestic production and power-plant stocks on the Subcontinent suppressed imports over the summer.

BIMCO also expects grain shipping to fall below last year’s levels by the end of the year despite a longer-than-average grain season in South America.

Average sailing distances have also fallen on the back of fewer longer trades of thermal coal: the drying up of South African coal exports to Asia is a “devastating example of this, especially when it is substituted by non-seaborne imports”.

Last year, South Africa send 5.2 million t of coal to China – less than half of the 12.4 million t it sent in 2013.

On the supply side, growth in the dry bulk fleet is slow – a good sign for the industry. However, demolition rates have slowed since the record rates in 1H15: “Although 306 ships have left the fleet so far in 2015, owners’ interest in making use of the demolition […] to limit supply growth seems to have evaporated completely over the summer,” said BIMCO.

“The poorest freight market on record is due to a combination of demand weakness and capacity abundance,” concluded the shipping association. “Unfortunately, there are no easy ways to escape this. As China is going through a period of transition that does not favour the dry-bulk shipping industry, the prime driver is out of the picture. Capacity has been abundant for years, so it’s the change to the demand side, the variable that the industry cannot impact, which is at the epicentre in 2015.”

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Read the article online at: https://www.worldcoal.com/handling/19102015/three-trends-keeping-the-dry-bulk-shipping-market-down-2030/


 

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