AsiaDry Cargo

Dry bulk market to remain weak for at least two more years

At a coal and freight seminar yesterday hosted by the Singapore Exchange and IHS, delegates heard how coking coal is following in the footsteps of iron ore as commoditisation and indexation gain traction. Sentiment was bearish for thermal coal with no meaningful price upside expected for at least the next four years. Pessimism was all-round in dry bulk freight, though the cape market is expected to fare relatively better than other vessel classes, and derivative liquidity is expected to continue to migrate eastward.

A panel discussion with Cargill, Noble and Rex Coal on dry bulk freight was described as bleak. Dry bulk freight rates may remain weak for a couple more years at least, and a recovery down the line is no inevitability. Derivative activity on the whole has also reduced amidst reluctance from shipowners to hedge at such historically low levels.

On coal specifically, the panamax market is missing 50-100m tonnes of coal demand as China imports decline, and without this it is hard to expect a recovery anytime soon.


Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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