2017: The Year for Dry Bulk?

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2017 looks to be a great year for dry bulk carriers, as an increase in trade and contract supply is set to support a recovery in charter rates of major dry bulk shipping routes, according to Drewry.

China has increased its imports of coal and iron ore to combat pollution, and it has helped boost the overall dry bulk market, its efforts to revive its economy have helped the iron ore trade to revive and are expected to further boost tonne-mile demand.

Drewry expects freight rates on the Brazil-China and Australia-China iron ore routes for Capesize vessels to strengthen over the next two quarters, but the return of laid-up vessels to trading could disrupt the expected improvement.

Rahul Sharan, Lead Analyst for Drewry, said: “Demand for coal-carrying vessels will increase in the coming quarters because Japan has decided to increase its coal-fired power generation, while China plans to cut domestic coal production which will increase import demand,”

“We further expect the grain trade to remain strong as recent heavy rains have enhanced the prospects for grains in Europe, CIS and North America, especially for maize and barley crops”

Other analysts at Dankse Bank and Clarksons Platou have also predicted a good year for dry bulk carriers, including Norden and Golden Ocean, despite the difficulty of 2016, according to Shipping Watch.

With the large amount of vessels being scrapped and industry-wide resistance to invest in shipbuilding, dry bulk investments have fallen dramatically, however both Dankse Bank and Clarksons Platou predict 2017 will see improvement for investors in dry bulk.

PTI’s Edition 71: The Bulk Edition is available to subscribers now here; Edition 71 features Technical Papers on the bulk sector, as well as the technological trends currently taking place within port and terminal automation, and supersized container shipping. Top contributors include Rolls Royce, Drewry and TBA. 

 

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