World Grain - July 2020 - 36

FEATURE: SHIPPING'S PERFECT STORM

er demand this year, particularly for panamax and
supramax vessels, with Brazilian soybeans exports
reaching a record in April at 16.3 million tonnes, for
example. However, a mixture of seasonal factors and
protectionist measures in the Former Soviet Union
are expected to see grains volumes decline during
the Northern Hemisphere's summer months.
Dry bulk shipping costs for grain shippers will, of
FRXUVH EH KHDYLO\ LQÀXHQFHG E\ WKH VXSSO\GHPDQG
balance for vessels across the market, particularly
GHPDQG IRU WKH ODUJHVW YHVVHOV LQ WKH JOREDO ÀHHW 2Q
the demand side of the equation, much will depend on
stimulus policies, especially in China, the world's lead
ing importer of coal and iron ore.
In early June there were some signals from the cape
size market that shipping costs for all vessels could be
dragged up by rising coal shipments and, especially, a
return to the iron ore market by Chinese steelmakers.
Whether this would last was unclear, with some ana
lysts insistent that the global economic situation would

RQO\VXSSRUWDVKRUWWHUPFDSHVL]HEXOOUXQEXWRWKHUV
more optimistic. Time will tell.
GROWING VESSEL SUPPLY
Dry bulk shipping's annus horribilis is not a pure
O\ GHPDQGVLGH VWRU\$V 06, QRWHG VWURQJ VXSSO\
growth is just as important, not least because disrup
WLRQVDW&KLQHVHVKLS\DUGVGXHWRHDUOLHU&29,'
shutdowns have now eased.
This saw 46 new bulkers delivered in April, 21 of
which were built in China.
"The disruptions at scrap yards, on the other hand,
KDYH RQO\ MXVW EHJXQ´ WKH DQDO\VW VDLG ³2QO\ RQH
vessel was scrapped in April as Bangladesh, India
and Pakistan all shut their doors to vessel demoli
tions. With such a poor outlook for earnings, we ex
pect there will be a spike in scrapping when breakers
UHRSHQEXWZLWKDUHODWLYHO\VWURQJQHDUWHUPRUGHU
ERRNÀHHWJURZWKDWDQDQQXDOL]HGZLOOGROLWWOHWR
help market balances. We expect layups to increase."

Baltic Exchange Dry Index
2,500

BDI

2,000
1,500
1,000

Nov 19

Jan 20

Apr 20

Jan 10

May 89

Jan 17

Aug 19

Jun 19

Apr 19

Jan 19

Nov 18

Aug 18

Jun 18

500

10,000

BDI

7,500
5,000
2,500

36

Aug 06

Feb 03

Set 99

Apr 96

Oct 92

May 89

Dec 85

0

July 2020 / World Grain / www.World-Grain.com

Source: 2020 Baltic Exchange Information Services Ltd

Baltic Exchange Dry Index


http://www.World-Grain.com

World Grain - July 2020

Table of Contents for the Digital Edition of World Grain - July 2020

World Grain - July 2020 - 1
World Grain - July 2020 - 1
World Grain - July 2020 - 2
World Grain - July 2020 - 3
World Grain - July 2020 - 4
World Grain - July 2020 - 5
World Grain - July 2020 - 6
World Grain - July 2020 - 7
World Grain - July 2020 - 8
World Grain - July 2020 - 9
World Grain - July 2020 - 10
World Grain - July 2020 - 11
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World Grain - July 2020 - 19
World Grain - July 2020 - 20
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World Grain - July 2020 - 76
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http://digital.world-grain.com/sosland/wg/2020_04_01
http://digital.world-grain.com/sosland/wg/2020_03_01
http://digital.world-grain.com/sosland/wg/2020_02_01
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https://www.nxtbook.com/sosland/wg/2015_03_01
https://www.nxtbook.com/sosland/wg/2015_02_01
http://digital.world-grain.com/sosland/wg/2015_01_01
https://www.nxtbook.com/sosland/wg/2014_12_01
https://www.nxtbook.com/sosland/wg/2014_11_01
https://www.nxtbook.com/sosland/wg/2014_10_01
https://www.nxtbook.com/sosland/wg/2014_09_01
https://www.nxtbook.com/sosland/wg/2014_08_01
https://www.nxtbook.com/sosland/wg/2014_07_01
https://www.nxtbook.com/sosland/wg/2014_06_01
https://www.nxtbook.com/sosland/wg/2014_05_01
https://www.nxtbook.com/sosland/wg/2014_04_01
https://www.nxtbook.com/sosland/wg/2014_03_01
https://www.nxtbook.com/sosland/wg/2014_02_01
https://www.nxtbook.com/sosland/wg/2014_01_01
https://www.nxtbook.com/sosland/wg/2013_12_01
https://www.nxtbook.com/sosland/wg/2013_11_01
https://www.nxtbook.com/sosland/wg/2013_10_01
https://www.nxtbook.com/sosland/wg/2013_09_01
https://www.nxtbook.com/sosland/wg/2013_08_01
https://www.nxtbook.com/sosland/wg/2013_07_01
https://www.nxtbook.com/sosland/wg/2013_06_01
https://www.nxtbook.com/sosland/wg/2013_05_01
https://www.nxtbook.com/sosland/wg/2013_04_01
https://www.nxtbook.com/sosland/wg/2013_03_01
https://www.nxtbook.com/sosland/wg/2013_02_01
https://www.nxtbook.com/sosland/wg/2013_01_01
https://www.nxtbook.com/sosland/wg/2012_12_01
https://www.nxtbook.com/sosland/wg/2012_11_01
https://www.nxtbook.com/sosland/wg/2012_10_01
https://www.nxtbook.com/sosland/wg/2012_09_01
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http://digital.world-grain.com/sosland/wg/2009_07_01
http://digital.world-grain.com/sosland/wg/2009_06_01
http://digital.world-grain.com/sosland/wg/2009_05_01
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