Skip to main content

The Future of Dry Bulk: Beyond the Trade War

Login/Register free for access
Author thumbnail
Author(s): Rahul Sharan, Lead Research Analyst, Drewry

The dry bulk market will continue to face risks in 2019 as tensions between China and the US further escalate following their highly publicised trade war of 2018, as high tariffs imposed by the US on imports from China will be detrimental for the Chinese exports sector in the long run. However, the Chinese government seems determined in warding off any influence of the trade war on its economic growth, yet to what extent and how long the government will succeed in keeping economic growth intact is difficult to quantify.

Despite all the fears and uncertainties we believe that charter rates will continue to increase due to a number of factors:

1. The economic and infrastructure development is driving up steel consumption in India. However, domestic iron ore is not able to match up with the growing steel production. Hence, import to India is rising swiftly.
2. The Indian government is looking forward to diversify supply sources for coking coal, which will result in increasing trade on long-haul routes (US-India and Canada-India).
3. Declining US soybean prices and…