The Baltic Capesize Index (BCI) is trading at its highest level since March 2009 adding 94 points on Tuesday to hit 6,474 points. Average daily earnings for capesizes were reported at $53,692 as Typhoon Chantu disrupted vessels off China.
Speaking at Marine Money Asia in Singapore on Tuesday Marshall said: “With the Covid rebound we've seen really very strong demand. We saw that picking up strongly from China and we've continued that this year.” While there is some talk of slowdown from China he noted steel prices remained high and that coking coal prices were very strong.
On the supply side of commodities this year has seen an additional 30m tonnes of iron ore coming into the market, much of it from Brazil which has an additional positive in terms of tonne miles. Marshall noted that bauxite was also up around 18% this year.
Looking in terms of shipping supply he noted the orderbook was modest for the larger sizes, and around 60 new ships had been added this year, all of which makes for a pretty healthy market.
Layered on top of this has been operational impacts of the pandemic. “Now it's really been supercharged by constraints, particularly with Covid issues,” Marshall said.
He noted the “incredibly difficult” situation with crew changes, and that they were having roughly 3.5% more idle or stationary days for capesizes. Compared to pre-Covid average waiting times for capesizes were up around 7% acting to tighten capacity.
“So that kind of strain on logistics, sort of the efficiency of the fleet after really added spice to the market,” he commented.
Marshall characterised it as a pretty strong market on top of a fundamental market that had finally strengthened.
Looking further ahead to the next two years he said, “with a rather bullish dry bulk hat on I think it looks pretty positive”.
While there will be ups and downs caused by Covid there would demand driven by the likes of the US infrastructure package, record electricity demand in India, and low coal stockpiles in China, as well as up to 30m tonnes of additional iron ore production from Brazilian miner Vale next year.
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