Spot rates are off to a slower start in 2023 across most shipping segments. The ingredients are in place, however, for a recovery in the coming months, especially post-Lunar New Year, reports Freight Waves.
That’s the “glass-half-full” view for bulk commodity shipping: Rates are down due to normal seasonality combined with an earlier than usual Lunar New Year holiday and the transient effect of China’s new COVID-19 policy. An upswing will follow.
The “glass-half-empty” view: Beyond seasonality, the across-the-board rate weakness in ocean shipping points to worsening recessionary pressures around the globe, and the “China reopening” sales pitch is overblown.
Dry bulk — the world’s largest ocean trade by volume — is almost always weak in the first quarter. It is also more exposed to China than any other shipping segment.
Rates have been particularly low this year. The Baltic Dry Index (BDI) fell to just 740 points on Monday. That’s its lowest level since June 2020 in the early stages of the pandemic. The BDI has fallen 41% since the beginning of this year and 87% since its latest peak in October 2021.
According to Clarksons Securities, spot rates for Capesizes — larger bulkers with capacity of around 180,000 deadweight tons (DWT) — were down to $6,100 per day on Monday, close to cash breakeven.