- Overall, total tonnes transported by the dry bulk shipping industry fell by 1.3% to 5.49 billion tonnes, from 5.56b in 2019.
- It is however still higher than the 5.46b tonnes shipped in 2018.
- China cements its position as the dominant player in dry bulk shipping with its imports now accounting for just shy of 50% of the market when measured in tonne-miles.
- This overall drop in tonnes marks discrepencies between different dry bulk commodities.
- Of the three main commodity grous: iron ore, coal and agriculture, coal is the only one to have fallen; down 102.2 million tonnes from last year (-7.4%).
According to a recent news article published in BIMCO, written by Peter Sand, Chinese imports accounts for 50% of market share of the dry bulk market after a turbulent year.
Chinese imports on high
The increase in Chinese imports means that the tonne mile demand from these accounted for 48.5% of total dry bulk tonne miles in 2020, up from 44.7% in 2019.
In comparison, when measured in tonnes, China’s share has risen from 32.8% in 2019 to 34.9% om 2020.
Growth not sufficient
The strong growth in Chinese imports has however not been enough to make up for the fall in imports by the rest of the world when measured in tonnes.
Here, demand fell by 4.5%, amounting to 167.7m tonnes, overshadowing the growth in China.
Tonne mile growth was a buffer for earnings
Across the board, dry bulk earnings averaged below breakeven levels in 2020, though no sectors experienced average earnings below 2016 levels.
Capesizes and Supramaxes were the hardest hit, averaging daily spot market losses of USD 2,271 and USD 1,170 throughout 2020, while Panamax and Handyssize ships were just a few hundred dollars below breakeven levels estimated by BIMCO.
Timing had a crucial role in determing owners’ profitablity, as rates in the second half of the year were much better than those in the first, as the recovery in China helped lift the dry bulk market.
Heading for a record breaking year
”We expect 2021 to be a record breaking year for the dry bulk industry both in terms of tonnes and tonne miles, with demand growth likley outpacing that of supply. However, this will not solve the overcapacity issue that has long plagued the dry bulk market and is an obstacle that will not disappear just because a new year has started or a vaccine has been found,” says Peter Sand.
For dry bulk shipping, the year can be divided in two, with lower volumes and earnings in the first half followed by a recovery in the second, as China split from the rest of the world, boosting tonne and tonne mile demand, and sending freight rates to profitable levels.
June was the turning point as volumes reached their highest point of the year, and earnings jumped, especially for Capesize ships.
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Source: BIMCO
