Dry bulk outlook amid COVID-19 impact
As the coronavirus took hold of global economic activity, dry bulk trade crashed. As some parts of the world cautiously move out of lockdown, what is the outlook for the shipping of cement and other dry bulk trades? By Rahul Sharan, Drewry Maritime Research, UK.
Figure 1: the world’s largest cement importers
(top) and exporters (bottom), 2019
The COVID-19 pandemic that started with China has now gripped almost the entire world, severely hitting global economic activities and sending dry bulk trade crashing since January 2020. The devastating impact of the virus on human lives will keep inhibiting industrial production, thereby denting demand for dry bulk commodities in the remaining quarters of 2020.
Moreover, even when the pandemic is under control, economic activity could still take a lot longer to recover. However, the extent of severity will differ across commodities, with demand for necessary commodities such as grain seeing a low impact, while that for commodities meant for industrial production and infrastructure, such as cement, a severe impact.
Moreover, Drewry expects a sharper recovery from 2021 in other developing countries where the industrial base is expanding at a rapid pace, such as in Asia. For example, India’s steel production has flattened recently and the ongoing lockdown will weigh on steel production further. However, the Indian government’s ambitious infrastructure plans will eventually lift the demand for cement and other infrastructure materials sharply over the next few quarters.
