- The dry bulk market saw a resurgence in the last two months of 2023.
- The market found support through increased Chinese coal imports, revealing tight balances.
- Vessels avoiding the Red Sea and opting for the longer Cape of Good Hope route.
Despite a challenging year, the dry bulk market saw a resurgence in the last two months of 2023. Marcus Hand’s interview with Will Fray from Maritime Strategies International (MSI) sheds light on the market dynamics, reports Seatrade.
Factors Influencing the Upswing
Initial expectations of Chinese stimulus driving steel and iron ore demand did not materialize. The market found support through increased Chinese coal imports, revealing tight balances.
2024 Forecast: Volatility and Directional Uncertainty
Will Fray anticipates volatility as a key driver in 2024. Uncertainty looms over whether the trend will be upward or downward.
Dry Bulk Demand Projections
China’s coal imports, a major player in 2023, are expected to stabilize or decline due to high stockpiles.
Offsetting this, improvements in European and Japanese iron ore imports are predicted, balancing overall demand.
Dry Bulk Ship Supply Dynamics
In 2023, newbuild deliveries exceeded scrapping, contributing to a net increase of 32 million dwt.
2024 is expected to see another 30 million dwt of new vessel capacity, with MSI anticipating balanced market conditions akin to 2023.
Freight Rate Outlook for 2024
MSI foresees broad volatility in spot markets, with a flat trend. Charter markets are expected to weaken year-on-year after a positive start in 2023.
Potential Impact of the Red Sea Crisis
The growing number of vessels avoiding the Red Sea and opting for the longer Cape of Good Hope route could lead to a 5% increase in tonnes miles growth if the Suez Canal remains closed in 2024. Prolonged issues in the Red Sea might sustain higher freight rates over the long term.
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Source: Seatrade
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