The dry bulk market looks set for a solid show, although conditions remain more than challenging, analysts with Macquarie said in a note, reports WSJ.
As the amount of iron ore and other goods carried by these ships races ahead of new capacity, the outlook for “dry bulk” carriers is improving.
Macquarie said that dry bulk rates are off their lows, in large part because shipping lines have introduced few new vessels into the market. In the first half of the year, capacity grew by less than 1% . That’s despite a pickup in iron-ore exports by major producers in Australia and Brazil, which has increased demand for dry bulk ships.
The rebound in dry bulk has parallels in the market for oil tankers, where rates surged in May and June as a global supply glut forced producers and traders to use ships as floating storage, while capacity was nearly flat.
Macquarie noted container shipping, which once appeared stronger than dry bulk, is seeing rates collapse as carriers flood the market with capacity and cut rates to maintain market share.
Commenting on the Capesize market, shipbroker Fearnley’s said in its latest weekly report that “the Capesize market firmed up this week, driven mainly by strong front-haul market and firm pacific fixtures.
On the Panamax market, Fearnley’s said that “after last weeks positive developments ended subdued, this week started in an unclear direction with paper trading up while physical was inactive.