Dry bulk shipping market likely to start recovery in 2021

Dry bulk shipping market likely to start recovery in 2021
07 May 2020

The dry bulk shipping market is expected to see significantly more modest levels of growth in the run-up to 2024, according to Rahul Sharan, lead research analyst dry bulk shipping at Drewry India during Cemtech’s live webinar “Impact of COVID-19 on the global cement trade” on 6 May.

After introducing the audience to the various demand and supply drivers that move the dry bulk shipping market, Mr Sharan explained the dry bulk shipping cycle and highlighted the importance of China entering the WTO in the early noughties, the downturn following the global financial crisis and the subsequent recovery of the market, which has been cut short by the impact of the coronavirus.

Going forward, he explained that growth in global dry bulk trade is expected to decelerate significantly to 2.1 per cent CAGR between 2019-24, down from 5.1 per cent experienced between 2000-18. Minor bulks such as cement have also seen their share of the market shrink from 29 per cent in 2000 to 25 per cent in 2019.

In terms of the question when global economic activity will rebound he presented three scenarios with the most positive scenario expecting a recovery at the end of the 2Q20 if the world gains control over the COVID-19 pandemic in the second quarter. Minor bulk trade is expected to experience a modest contraction. In the low-case scenario, the coronavirus will continue to disrupt economic activity in the 3Q20 and recovery would not be expected until the last quarter of this year at the earliest, with a contraction of at least five per cent seen in the minor bulk trade.

The demand-supply balance is forecast to ease with a base case seeing modest growth in Handysize time charter rates from 2021 while equivalent Supramax rates are anticipated to rise at a slightly higher pace from 2021. In the high-case scenario all shipping rates, including Handysize and Supramax, are expected to show significant expansion, while in the low-case scenario the market is forecast to show limited growth.

Next Cemtech webinar
Cemtech’s next live webinar “The cement plant digital transformation – making cement industry 4.0 happen” will take place on 20 May 2020 at 14h (BST – London, UK). Register for free here.

Published under Cement News