The boom in product growth sent bulk shipping costs to a decade high

Prices of cargo ships that supply fuel to industries around the world and feed the world have risen, raising hopes that the fortunes of the dry bulk shipping sector will change.

Roaring Chinese Demand for iron oreThe main components of steel, the return to manufacturing power in the rest of the world, and the low investment in new ships in recent years have led to a sharp rise in the price of dry bulk carriers, which operate to transport crude raw materials in large holdings.

The Baltic Dry Index, which tracks the rates of three major ships, has reached its highest level in more than a decade, rising more than 70,000 percent since April 2020. The capsized ship, with an average size of 160,000 deadweight Clarkson Plato Securities, received 41 41,500 a day for instant rent, double that a month ago and nearly eight times last year’s average.

“China’s insatiable appetite for iron ore has become the single most important factor,” said Ulrich Uhrenfeld Anderson, chief executive of the Capsize Ship’s largest listed gold ocean.

Iron, an important source of some of the world’s largest miners’ profits, hit a record high of about ০ 230 this week as Chinese steel mills shrank production at the highest domestic prices.

This was followed by the introduction of production carbs in Tangshan, China’s top steel-making city, as part of a pollution crackdown, but the move has only helped reduce power and raise domestic prices, which have occupied mills in other parts of the country.

The world’s other largest importer of ships tied up with coal and other materials outside the port, with record high coarse grain exports between China and Australia contributing many to the recording market for free.

“The stars are attached to the dry bulk,” said Las Christophessen, chief executive of the Norwegian carrier Torvald Klavigi.

The sector has been plagued by overcrowding since the financial crisis of FY 2009-9, despite strong demand for raw materials. The epidemic-induced drop in the commodity market last year led to this tragedy, but the rising demand for raw materials now that the world has recovered has helped change the fate of the dry boy.

“For all the big cargo transportation, it’s been a lost decade,” Christophessen said. “It’s been a frustrating market and the returns haven’t been enough, basically since we were ordering a ship because there’s no tomorrow. It took 10 years to wash it out of the system.”

The industry is confident that prices will rise this year. Peter Hagen, an analyst at Kepler-Chuvrex, says capsized ships could fetch up to লক্ষ 1 million a day in the second half of the year.

Analysts have cited the silent supply of new ships in support of monetary policy, the shake of replenishing depreciated inventories and higher prices to encourage economic growth.

However, the industry is divided over whether the assembly will be a long-term trend. Rising market prices for a wide range of commodities led to a super cycle – a long period of high prices – setting all cylinders of the big economy on fire. Speculation has begun to speculate as to whether this will have a trickle-down effect for dry bulk shipping.

Iron ore prices on steel demand appear at record highs per ton chart

Joaquim Hannisdahal, head of research at Cleves Securities, said that over the long term of price increases, it is more likely that owners will stop buying lots of new ships each month.

“Until then We don’t get a new ‘black swan’ In terms of demand, a supervisory person who will be there will remember it for a lifetime, “he said, referring to unforeseen events with major implications as an epidemic.

The boom in the container shipping markets since the fall of last year, which preceded the assembly of dry bulk ships, encouraged the wave of shipyard orders, now delaying the date of any bulk ship orders.

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“The yards are filling up quickly with orders from non-blockers,” said Edward Battery, chief executive of Taylor Maritime, a small carrier owner. “As institutional investors’ interest in shipping re-emerges, his company is preparing to create a rare sea list in London.

While some owners are optimistic about more tailbinds, the controversy points to ongoing global controls that will allow ships to reduce their carbon emissions by 2023. Slow down the flow of steam by slowing down the flow of steam. It can be removed slowly, slowly, slowly, slowly, slowly, slowly, slowly, slowly, slowly, slowly, slowly, slowly, slowly, slowly, slowly, slowly, slowly, slowly, slowly, slowly, slowly.

“Another catalyst is that new rules on ship design and emissions are expected to be introduced by 2023. About 75 percent of the dry fleet will not comply with the new regulations, ”Anderson said.

But skeptics say the main missing component of the supersyx is the lack of sustainable energy, such as the rise of China, which drives high-end prices and whose imports now make up about half of the dry bulk shipping market.

Double-scale chart, showing U.S. exports of coarse grains to the United States by several million tons, growth rate between January 2019 and 2021

Environmental pressure is also decreasing. If China is serious about reducing emissions and reducing steel output, analysts believe that sanctions are needed in other regions, such as Tangshan. The approach seems even more obscure for coal used in power generation, which contributes about 20 percent of the dry bulk shipments of the sea.

“Thermal coal will decline this decade,” said Peter Sand, chief shipping analyst at shipbuilding firm Bimco. “There are more barriers on the horizon when it comes to climate change and dry bulk shipping.”

He added that prices – still about one-third of the 200-level level – would probably be more comfortable as the ship’s power surplus still exists.

“I see it as a rare off-season event. . . There are underlying factors that define a particular gravity, “he said. However, he added,” What’s not to like right now about dry bulk shipping. “

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