In its monthly freight review SGX noted that the Baltic Dry Index (BDI) had ended June up by 8%. The capesize market was up 17% at the end of June and panamaxes up 15%, with the report noting that volatility was at “uncharacteristically” low levels, especially for the capesize market.
“In the coal market, domestic Chinese output restrictions and the resulting rise in unit costs have been spurring some optimism of stronger seaborne coal demand,” it commented. SGX also noticed that over the last decade iron ore exports from Brazil have been higher in the third quarter than the second quarter of the year.
However, the near term positive trends in the market was contrasted by growing concern over when the demand and supply gap in dry bulk shipping would close. SGX said its latest industry survey showed participants views becoming “moderately more cautious” on a sustainable rebalancing of demand and supply with another 18 months of pain expected, and recovery in the second half of 2017 no longer forecast.
It said few anticipated a meaningful improvement in demand and supply before 2018 and a quarter not expecting this to happen till 2020 or later.
“Our survey also indicated a consensus view of between 0-3% global net dry bulk fleet growth this year,” SGX added.
Copyright © 2024. All rights reserved. Seatrade, a trading name of Informa Markets (UK) Limited. Add Seatrade Maritime News to your Google News feed.
