While some market observers are quite bullish in the face of recent freight rate improvements, others emphasize that market fundamentals have not really changed. They fear another global recession impacting the dry bulk sector
Rating agency Fitch expects dry-bulk trading volumes to grow by 3% in 2020, up by more than 1.5% from[ds_preview] 2019, driven by higher iron ore volumes together with other commodities, such as coal, grains and steel.
Iron ore volumes, which constitute over a quarter of global dry-bulk trade, suffered in 2019 due to lower exports from Brazil and Australia following an accident at Vale’s site in January and weather effects at Australian ports. »However, shipments are picking up with capacity gradually coming back online. Higher iron ore supply should be matched by better demand due to higher global steel output,« Fitch said in it’s recent shipping sector outlook.
India’s iron ore imports could also rise in 2020 due to potential delay in renewal of several domestic mining leases that are due to expire. Volumes for coal, which constitute almost 25% of global trade, should be supported by higher coal-fired power generation in emerging Asia.
Although positive signs are showing, BRS Brokers’ Head of Energy Research, Andrew Wilson, was less optimistic, speaking recently at the HANSA-Forum »Shipping
