World Grain - July 2018 - 51
has the backstop of its U.S. ownership. So it's not mission critical as of yet - especially with China in-port
stocks sitting at 4-year highs and more concerns and issues about downstream soymeal demand, and what that
growth for actual soybean imports may or may not be
in 2018-19 (given the) government, there is talk about
a contraction of imports from this year to next year."
with rates for handysize, supramax and panamax vesVHOVXSE\WRLQWKH¿UVWIRXUPRQWKVRIWKH
\HDU FRPSDUHG WR D \HDU HDUOLHU DV ¿UVWTXDUWHU VHDsonal volumes proved stronger than usual, according to
Sand. The International Grains Council's IGC Grains
and Oilseeds Freight Index rose from 100.89 points on
June 6, 2017 - its lowest point all year - to 125.94
on May 29 this year.
Unless owners drastically speed up ships, an unlikeFortunately, the day-to-day fundamentals of the bulk ly scenario given the current spike in oil and therefore
carrier sector are far easier to read than the world's ship bunker prices, higher freight rates are set to last
Great Power pronunciations on trade policy or, indeed, through the rest of the year and, indeed, beyond should
industrial relations in South America.
recent demand and supply projections hold.
Bimco, for example, notes that new vessel orders are
the last 12 months Chinese demand for high volume DWKLVWRULFDOO\ORZOHYHOVLQDQGQHWÀHHWJURZWKLV
cargoes such as iron ore and coal have dictated, for the not expected to rise above 2% before 2021.
most part at least, movements in the key vessel indices
"As Bimco sees 2% demand growth as the long-run
(see Baltic charts, page 50) with spikes in demand from DYHUDJHDÀHHWJURZWKRIRUOHVVLVUHTXLUHGWRDYRLG
China producing large variations in capesize earnings a worsening of the fundamental freight market condiLQODWHDQGHDUO\ZKLFKDOVRZHUHUHÀHFWHG tions," Sand said. "Considering the current orderbook
in the other categories, albeit with less violence.
and our assumptions for actual delivery dates, the dry
Higher shipping prices have continued into 2018, bulk shipping industry remains on the road to recovery,
www.World-Grain.com / World Grain / July 2018