In response to recent developments shipbroker Simpson Spence Young (SSY) has lowered its dry bulk trade forecasts and now anticipates minimal year-on-year growth in the first half of this year.
For 2019 as a whole, SSY Consultancy & Research expects seaborne dry bulk trade to expand 2%, the slowest rate of growth since 2015, which would compare with approximately 2.7% last year.
SSY said in a release on Friday that there are a “multitude of major uncertainties” at present for the short-term trade outlook. These include the implications for iron ore trade from last month’s tragic dam burst in Brazil and the subsequent temporary halt to production at some of Vale’s mines, the distortion of typical soya bean trade flows from the US-China trade war, and China’s appetite for imported coal in the remainder of 2019. The most of fundamental risk of all, SSY stated, is the underlying health of the global economy, including prospects for economic stimulus in China.
Dry bulk’s dire start to 2019 saw the Baltic Dry Index slide below 600 points earlier this month, but in the past week the index has shown signs of picking up. Vale’s multiple problems in the past month have been described as a “developing black swan story” in a dry bulk report from Cleaves Securities, issued earlier this month.
