Coaltrans Global 2021Sailors SocietyTBA GroupViganTOC EventsCleveland Cascades Ltd
  • TBA Group
  • Van Aalst
  • TOC Events
  • Coaltrans Global 2021
  • Vigan
  • Sailors Society

Fundamentals hit dry bulk again

(Posted on 03/12/19)

The fundamental balance in the market has worsened in 2019 with supply growth outstripping demand, and BIMCO expects that this will continue into 2020.

After peaking in September, the fundamentals of the market have begun to drag on freight rates – although the rates remain above the average experienced so far this year, buoyed by a handful of positive developments during Q3.

Capesize ships are the only dry bulk ships to have seen average freight rates in the first 10 months of this year higher than those in the corresponding period of 2018 with average rates up USD 624 per day, pulled up by the peaks in earnings experienced towards the end of Q3. On the other hand, average earnings are down for all the smaller vessel sizes: -3.2% for Panamax, -12.7% for Supramax and -17.1% for Handysize.

Although Brazilian iron ore exports have suffered after the Vale tailings dam collapse in January, firmer exports in Q3 helped push Capesize rates to six-year highs, despite total Brazilian exports still being 12.3% lower in the first 10 months of 2019 compared with the same period of 2018.

For only the third time this year, monthly exports exceeded 30m tonnes, with 31.2m tonnes exported in October. In 2018, this export level was reached in nine of the 12 months. Indications from Vale suggest that exports may face renewed pressure through to the end of the year, Although after falling to zero at the start of November, the number of spot cargoes being reported has increased.

Imports of iron ore to China have also fallen, down 1.6% in the first 10 months of the year. Nevertheless, imports in September were the third-highest ever, pulling year-on-year accumulated growth rates up from the -5% they had been hovering around throughout the year.

2018 was the first year in which Chinese iron ore imports fell, and BIMCO expects this trend to continue as China moves towards using scrap steel, rather than imported iron ore in steel production.

Despite all earnings coming down since their peak in September, they remain much higher than during the first half of the year when rates tumbled.

Agricultural exports have been a mixed bag so far in 2019. While overall soya bean exports from Brazil and the US are down 6.8% in the first nine months of the year – a loss of 90 Panamax loads (75,000 tonnes) – corn exports from Brazil and Argentina have been a positive development.

Brazilian corn exports are up 123.8% in the first 10 months of the year, with volumes from Argentina up 48.7%. This brings total exports from the two countries to 60 million tonnes, or an additional 317 Panamax loads, compared with exports from the two countries in the same period of 2018. On the other hand, the US has seen falling corn exports, down 44.3% in the first nine months of the year.

Rates for these vessel sizes have since fallen, as US soya bean exports, usually strong in the last four months of the year have, like last year, disappointed in September and October. The US soya bean marketing year runs from September to August, and in the first nine weeks exports are down 3.8 million tonnes from the same period in the 2017/2018 marketing year-the last one unaffected by the trade war. Despite rumoured breakthroughs in trade talks, BIMCO expects that exports in the main US soya bean season will continue to be lower than those in previous seasons unaffected by the trade war.

Dry bulk fleet growth in 2019 is already higher than it has been in any year since 2014. It is currently standing at 3.5%, and BIMCO expects it to rise to 4.1% by the end of the year. This is based on the expectation that a further6m deadweight tonnage (DWT) will be delivered betweenmid-November and the end of the year, adding to the 36m DWT already delivered, and 0.9m will be demolished. This would bump the total demolition up to 7 million DWT.

Latest News

Columbia and Seatrans agree strategic shipmanagement tie-up

(Posted on 06/05/21)

Columbia Shipmanagement (CSM) has continued its recent expansion by agreeing a strategic partnership... Read more


OneLearn Global signs up to Neptune Declaration

(Posted on 06/05/21)

Recently launched OneLearn Global, created to provide modern-day training solutions to serve the maritime... Read more


IMO Council membership demonstrates Jamaica’s worth

(Posted on 06/05/21)

Membership of the International Maritime Organisation is important for strengthening Jamaica and the... Read more


CCS grows bulker fleet and scores with Intercargo

(Posted on 04/05/21)

China Classification Society (CCS), the world’s fastest growing classification society, has been... Read more


Su-Nav establishes integrated ship management model

(Posted on 04/05/21)

Su Nav, the integrated ship management company, has established a comprehensive range of services over... Read more


Fednav welcomes its latest icebreaking bulk carrier

(Posted on 29/04/21)

Fednav Limited has announced that it has taken delivery of its latest Polar Class 4 icebreaking bulk... Read more


InterManager vows to source vaccinations for seafarers

(Posted on 29/04/21)

Frustrated by the lack of progress and slow pace of international efforts, InterManager has vowed to... Read more


IOMSR first flag state to partner Eyesea ocean clean up

(Posted on 29/04/21)

The Isle of Man Ship Registry (IOMSR) has become the first flag state to formally back the Eyesea initiative... Read more


IoS-OP fully utilized in new bulk carrier

(Posted on 29/04/21)

IoS-OP*1 has been fully utilized in the bulk carrier built by Shin Kurushima Sanoyas Shipbuilding Co... Read more


MAG’s volumes increase despite Covid challenge

(Posted on 28/04/21)

Despite the challenges of Covid-19, Morska Agencja Gdynia (MAG), in Poland, has performed even better... Read more


Port of South LouisianaPort of StocktonCimbriaTelestackThe Wolfson Centre for Bulk Solids Handling Technology Bühler GmbH
  • Port of South Louisiana
  • Telestack
  • Cleveland Cascades Ltd
  • Bühler GmbH

Subscribe to our newsletter

Keep up to date with the latest global news in bulk cargo handling and shipping