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Dry bulk shipping market outlook H2 2023

Any hopes that the dry bulk shipping market would improve in the first half of 2023 have failed to materialise as a bounce back in Chinese demand did not happen as expected. So, what does the second half of the year hold in store?

Marcus Hand, Editor

July 21, 2023

In the second part of our shipping market outlook series we are focusing on the dry bulk sector with Plamen Natkoff, Associate Director for Dry Bulk Commodities and Freight with Maritime Strategies International (MSI).

You can listen to the full interview as a podcast in the player above

What happened to the China rebound?

Natkoff tells the Seatrade Maritime Podcast that at the beginning of this year as China came out of the Covid pandemic and put in place support measures for the property market hopes were high that the dry bulk shipping market would perform well. However, the impact of the measures of China’s property market have disappointed. “In fact they are running at below last year’s levels.”

The support measures for the Chinese property market have now been extended into 2024 rather than ending this year.

“So the question is about whether these would be sufficient to support the markets from here on, which of course plays into what we can expect for Q3 and Q4,” Natzkoff said.

How important is China to the dry bulk shipping market?

Natzkoff explains that the vast majority of major dry bulk trades are China focused. For iron ore, which drives the Capesize sector the Chinese market accounts for 50% to 60% of all flows. “More recently, China has stepped back into the coal market – the thermal and coking coal market, so, that is meaningful as well,” he says.

Are there any positive signs for Q3 and Q4?

The outlook for dry bulk shipping rides very much on the major trades. Looking at iron ore, Natzkoff comments, “At the moment, it is difficult to see upside on the iron ore front, especially compared to what we had last year.”

The coal side of the equation looks more positive with China stepping back into that market. “During March to May they [China] had record amounts of coal imports at over 30 million tonnes per month for the first time ever.”

Much lower natural gas prices in Europe have driven down demand for coal, which in turn has brought down coal prices as well. At the same, China wants to avoid the power outages that it saw last summer which could have helped drive its demand for coal. The question Natzkoff says is how long will that demand last?

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dry bulk shipping

About the Author

Marcus Hand

Editor

Marcus Hand is the editor of Seatrade Maritime News and a dedicated maritime journalist with over two decades of experience covering the shipping industry in Asia.

Marcus is also an experienced industry commentator and has chaired many conferences and round tables. Before joining Seatrade at the beginning of 2010, Marcus worked for the shipping industry journal Lloyd's List for a decade and before that the Singapore Business Times covering shipping and aviation.

In November 2022, Marcus was announced as a member of the Board of Advisors to the Singapore Journal of Maritime Talent and Technology (SJMTT) to help bring together thought leadership around the key areas of talent and technology.

Marcus is the founder of the Seatrade Maritime Podcast that delivers commentary, opinions and conversations on shipping's most important topics.

Conferences & Webinars

Marcus Hand regularly moderates at international maritime events. Below you’ll find a list of selected past conferences and webinars.

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