- dry bulk and container freight rates are set to stay elevated this year
- roaring commodity demand and underinvestment in recent years have pushed dry bulk freight rates higher
Container freight rates and dry bulk are set to stay elevated this year says an article on Xinder Marine.
Roaring commodity demand, a return to strength in manufacturing activity as well as the scrapping of vessels and underinvestment in recent years have pushed dry bulk freight rates higher, and shipowners such as Malaysian Bulk Carriers Bhd (Maybulk) and Hub line Bhd are likely to gain further traction from the higher rates, as capacity is likely to get even tighter.
The Baltic Dry Index (BDI), a bellwether for global dry bulk shipping, has risen 137% year to date (YTD) to close at 3,241 points last Wednesday. It touched a multi-year closing high of 3,418 points on June 29.
The surge in BDI has translated into a broader lift for the local dry bulk shipping market, which saw freight rates starting to climb in March to levels not seen in the past decade, says Hub line CEO and managing director Dennis Ling Li Kuang.
He notes that the group’s freight rates were up 25% in June 2021 from December last year, owing to a shortage of vessels to carry cargo in Southeast Asia. Ling believes dry bulk freight rates are likely to stay at elevated levels throughout the year.