Drewry: Firm Demand to Drive Recovery in Dry Bulk Shipping

Image Courtesy: Diana Shipping

Dry bulk shipping charter rates are expected to continue to recover with firm demand and controlled fleet growth, shipping consultancy Drewry said.

In it latest report, Drewry has revised its charter rates forecast in the short term as the date to implement ballast water management systems (BWMS) has been postponed by two years, bringing down the forecast for demolitions that will eventually support fleet growth.

Despite the increased fleet supply, charter rates will strengthen because demand will grow faster. The recovery in rates will become more prominent in 2019 and 2020 when the IMO regulations will be implemented, Drewry explained.

Ton mile demand will grow at a healthy pace of around 3% annually over the next five years while fleet supply is expected to expand at a rate of just 1% a year over the same period. The slowdown in fleet growth can be credited to low deliveries because of a thin order book and high demolitions resulting from the upcoming environmental regulations, according to Drewry.

Demand will improve with the strengthening of iron ore, coal, grain and minor bulk trades. As informed, the rise in infrastructure activities in China is expected to support imports of iron ore and other minor bulk commodities.

Among the major events that will decide the future of the dry bulk market, India’s re-emergence as a significant iron ore exporter stands at the forefront. Indian iron ore exports are making a silent comeback from a mere 4 million tons in 2015 to more than 20 million tons in 2016 and expected to be more than 30 million tons this year, Drewry said.

“We believe India’s return to the seaborne iron ore market will have wide implications for the dry bulk trade in the coming quarters. Iron ore exports from India to China that resumed at a fast pace, could reclaim a part of their lost share from Brazil and Australia,” Rahul Sharan, Drewry’s lead analyst for dry bulk shipping, commented.

Drewry believes increased iron ore exports from India will provide additional employment opportunities to Supramax and Panamax fleets, and marginally to the Capesize fleet.

“Many Indian ports have been dredged further to accommodate Capesizes, but a large part of the ore will still be carried on smaller vessels, providing employment and higher utilisation to smaller segments,” Sharan added.

Share this article

Follow World Maritime News

In Depth>

Events>

<< Nov 2017 >>
MTWTFSS
30 31 1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 1 2 3

Maritime Information Warfare 2017

Maritime Information Warfare will focus on the growing need for navies to develop their information exploitation capabilities…

read more >

INTERNATIONAL GREEN SHIPPING AND TECHNOLOGY SUMMIT

The Summit will gather key marine experts and companies around the globe which have a big influence in the industry…

read more >

The CWC 18th Annual World LNG Summit & Awards Evening

The CWC World LNG Summit will continue to give you access to premium networking opportunities as it brings together the who’s who…

read more >

Marintec China 2017

The largest maritime event in Asia Pacific, Marintec China connects maritime professionals from the entire shipbuilding supply chain together.

Over the years, Marintec China has grown to reflect the size and importance of the Asian maritime market. 2015 event is another record-breaking edition with the largest exhibition area and the highest number of industry professionals attending ever. The encouraging figures proven that China remains one of the major shipbuilding nations and Marintec China has been the most authoritative platform in Asia.

With the maritime industry facing great opportunities but also many challenges, it is important for the industry to connect and engage more to ultimately win new business in globally-significant markets. A visit to Marintec China is a great way to learn about the latest technology and innovation of the supply industry, a platform for industry professional to meet face to face, make connection and do business.

Marintec China is poised to be the definitive event and is undoubtedly a must-attend for all involved in the maritime industry.

Marintec China will be held from 5 to 8 December 2017 at the Shanghai New International Expo Centre in Shanghai, China and continue its dedication to serve as the “LEADING” platform “CONNECTING” the community and “STRENGTHENING” the maritime industry.

Marintec China offers the perfect opportunity for companies serving the maritime market to showcase their innovations, products and services to a wide audience. A platform for face to face meetings in business, creating new relationships and consolidating existing ones.

More info

read more >