The dry bulk shipping market has seen a notable rebound in the first half of 2024, largely driven by the Capesize sector and robust iron ore trades. In a Seatrade Maritime Podcast episode, Plamen Natzkoff, Associate Director for Dry Bulk Commodities and Freight with Maritime Strategies International (MSI), shares insights into the market’s performance and prospects for the remainder of the year.
Strong Performance in Capesize Sector
The Capesize sector has been the standout performer in the first half of 2024, with rates nearly doubling compared to the same period in 2023. This growth has been fueled by a 20% increase in iron ore trade, particularly from Brazil to China, and a rise in bauxite shipments from West Africa. These long-haul routes have significantly supported the Capesize market, contrasting with a decline in coal trade impacting Panamaxes and Supramaxes.
Expectations for the Second Half of 2024
The second half of the year typically sees an uptick in commodity market volumes, driven by iron ore, coal, and grains. Natzkoff predicts continued strength in the dry bulk market, barring any significant disruptions. However, ongoing issues such as the Red Sea conflicts pose a potential risk to market stability, potentially maintaining the market’s volatility.
Vessel Supply and Fleet Ageing
Stronger market conditions have led to a slowdown in vessel scrapping, resulting in an aging fleet. Higher secondhand vessel prices have also spurred new building orders, with the Capesize benchmark price for a five-year-old vessel reaching around $60 million. With approximately 25 million tonnes of new deliveries expected this year, the fleet is set to expand, though future growth will depend heavily on underlying trade flows and geopolitical factors.
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Source: Seatrade Maritime
