Dry Bulk Shipping Facing Anaemic Demand Growth

The Baltic Dry Index (BDI), which measures the price of moving raw materials by sea, has fallen to 634 on May 15 after hitting a high of 1484 last November. Even that 634 mark is better than the record low of 509 which the BDI reached in late February.

The shipping industry has been hit hard by slowing demand for raw goods out of China as well as the fact that new ships commissioned during the boom times of the past few years are finally being finished. This change has been noticed by container companies such as Royal Wolf.

Thanks to these difficulties, dry bulk container ships are being scrapped at record rates, as 52 ships have already been sold for scrap so far in 2015.

How soon the dry bulk market will recover is a matter of debate. Global shipping consultancy Drewry released a report on Friday stating that they do not expect a return to profitability until 2017, according to the Maritime Executive.

“Anaemic demand growth is here to stay, especially as the trade development in coal and iron ore into China is expected to decline further,” commented Rahul Sharan, Drewry’s dry bulk shipping lead analyst.

But another analysis is that dry bulk shipping may have bottomed out and that the market will get better soon. Tony Caldaro from Investing.com agrees that the primary determinant of the dry bulk market is how high commodity prices are.

dry bulker

But while Drewry expects commodity prices to fall due to lower demand from China, Caldaro expects commodity prices to rise due to cyclical market trends. He notes how commodity prices have fallen for the past seven years, but prices have begun rising in certain key areas.

While the demand for crude oil and other commodities may rise, it seems clear that China intends to move away from coal iron and towards cleaner forms of energy and production. For now, the dry bulk shipping industry will continue to struggle for some time as companies restructure themselves.

Hot this week

Did David Wineland and Serge Haroche Steal Idea For The Nobel Physics Prize?

Dr. Omerbashich says the Royal Swedish Academy is a Crime Scene and he has the proof that Nobel laureates stole his discovery.

New Approaches to Disaster Relief Challenges

Disaster relief has always been a challenge. NASA, Google,...

3 Legitimate Money Making Methods to Supplement Your Income

In a perfect world, when your landlord raises your...

2016 Predictions by World Renowned Medium and Psychic Lindy Baker

World renowned medium and psychic Lindy Baker is interviewed by The Hollywood Sentinel, discussing psychic power, the spirit world, life after death, areas of concern in 2016, and much more.

Digital Coupon Customers Spending More Than Double At Stores

A new study shows that customers who use digital coupons go shopping more for groceries and other household goods more often and spend more on their shopping trips.

Setting the Scene in the Green Leadership Contest

An informative analysis of the UK Green Party leadership contest and its pro Palestinian stance on antisemitism, trans rights, and other human rights issues

When Celebration Becomes a Scapegoat

Celebration is not chaos, but neither is it a chance to jam a foreign culture down the throats of people who have long assimilated into a country.

The Comfort of Condemning Trump – and the Cowardice of Silence Elsewhere

It’s become something of a global reflex: condemn Trump. Dismiss him as a narcissist, a populist, a threat to democracy.

The Finance Herald and Top Under-the-Radar Finance & Tech Platforms Worth Exploring

In the vast landscape of financial and technological media,...

Is PolyPid Stock Undervalued? (NASDAQ: PYPD)

In the competitive landscape of biotechnology investments, discovering undervalued...

Israel’s Failed Narrative Dulls Victory In Battle

For years Israel's failure in its public diplomacy, what they call in Israel hasbara, meaning to explain, has been discussed ad nauseam and to no avail.

Related Articles

Popular Categories