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Bleak Outlook for Bulk: A Long Term Perspective

Drewry retains its cautious view over the long term, with a lot dependent on how China’s steel production grows. Drewry forecasts organic growth in infrastructure activities in China in the long term, which will give the much-needed boost to the bigger vessels during that period. However, a shift away from coal in many economies and a shift away from imported coal in India are downside risks for the bigger vessels in the long term.
 
Handysize and Supramax vessels have many emerging markets to cater to, and this will help them in the long term. For example, Myanmar is emerging as a good market for Handysize vessels as the country has been exporting rice and importing cement. Similarly, some African countries, such as Mauritania and Gabon, are increasingly importing cement and aggregates, among others, which would cater to the smaller vessel segment. With varied types of cargo originating from ports with draft restrictions, we expect earnings for the smaller vessels to be less volatile…
Rahul Sharan, Lead Research Analyst, Drewry, New Delhi, India

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