World Grain - July 2021 - 34

SHIPPING
COSTS
SOARING
Commodities 'supercycle' driving up raw material prices and ship owner profits
by Mike King
I
s the US-China trade war dead? It certainly is for US
agricultural exporters, although renewed demand is
bringing with it the specter of soaring bulk shipping
costs. Indeed, ship owners are enjoying something of
a commodities supercycle that is driving up both the
prices of raw materials and ship owner profits.
Overall demand for bulk shipping in the first four
months of 2021 reached a record 1.69 billion tonnes,
up 6.1% compared with the same period last year, according
to shipping association Bimco. It is not hard
to identify what has been firing demand: commodity
prices are approaching, and in some cases exceeding,
historical peaks. China's iron ore import price,
for example, recently passed $200 per tonne for the
first time, while prices for Australian coal topped
over $100 per tonne earlier this year - still below
the peak of $180 per tonne enjoyed by miners in mid2008
but more than double the lows of mid-2020. US
corn and soybean prices in spring neared the record
highs reached during the vicious drought of 2012 that
devastated production.
" Demand has been buoyed by government stimulus
packages and the continued, albeit unsteady, recovery
of the global economy from the worst effects of
COVID-19 lockdowns, " noted shipping analyst MSI.
34
The upshot of all this has been far higher rates for
shippers and healthy bottom lines for ship owners.
Capesize earnings in May were running at a daily average
of $36,536, more than nine times higher than in
May 2020. The rest of the market also was delivering
strong profits to owners and operators, noted Bimco,
with panamax earnings standing at $24,903 per day
and supramaxes $27,430 per day on May 26.
" Just as freight rates are up for all ship sizes, the
appetite for cargo transport has increased across the
board, " said Peter Sand, chief shipping analyst at
Bimco. " Supramaxes are the biggest winners, with
demand for these soaring by 10.6% in the first four
months of this year, compared with 2020. "
Over the same period, capesize demand rose by 6%
and panamax demand edged up 1.5%.
Grain trade surging
Grain shipments are more than playing their part in the
commodities supercycle with demand for bulk carrier
capacity out of the United States and Brazil driving
up freight and charter rates in sub-capesize shipping
markets.
" A surge in grain trade has been a key reason for the
current continuous rally in the dry bulk market, espeJuly
2021 / World Grain / World-Grain.com
©Igor Strukov - stock.adobe.com
http://www.World-Grain.com

World Grain - July 2021

Table of Contents for the Digital Edition of World Grain - July 2021

World Grain - July 2021 - Intro
World Grain - July 2021 - 1
World Grain - July 2021 - 2
World Grain - July 2021 - 3
World Grain - July 2021 - 4
World Grain - July 2021 - 5
World Grain - July 2021 - 6
World Grain - July 2021 - 7
World Grain - July 2021 - 8
World Grain - July 2021 - 9
World Grain - July 2021 - 10
World Grain - July 2021 - 11
World Grain - July 2021 - 12
World Grain - July 2021 - 13
World Grain - July 2021 - 14
World Grain - July 2021 - 15
World Grain - July 2021 - 16
World Grain - July 2021 - 17
World Grain - July 2021 - 18
World Grain - July 2021 - 19
World Grain - July 2021 - 20
World Grain - July 2021 - 21
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World Grain - July 2021 - 28
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World Grain - July 2021 - 31
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World Grain - July 2021 - 33
World Grain - July 2021 - 34
World Grain - July 2021 - 35
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World Grain - July 2021 - 38
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https://digital.world-grain.com/sosland/wg/2020_12_01
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https://www.nxtbook.com/sosland/wg/2015_12_01
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http://digital.world-grain.com/sosland/wg/2015_08_01
http://digital.world-grain.com/sosland/wg/2015_07_01
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https://www.nxtbook.com/sosland/wg/2015_04_01
https://www.nxtbook.com/sosland/wg/2015_03_01
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http://digital.world-grain.com/sosland/wg/2015_01_01
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https://www.nxtbook.com/sosland/wg/2011_11_01
https://www.nxtbook.com/sosland/wg/2011_10_01
https://www.nxtbook.com/sosland/wg/20111_09_01
https://www.nxtbook.com/sosland/wg/2011_08_01
https://www.nxtbook.com/sosland/wg/2011_07_01
https://www.nxtbook.com/sosland/wg/2011_06_01
https://www.nxtbook.com/sosland/wg/2011_05_01
https://www.nxtbook.com/sosland/wg/2011_04_01
https://www.nxtbook.com/sosland/wg/2011_03_01
http://digital.world-grain.com/sosland/wg/2011_02_01
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http://digital.world-grain.com/sosland/wg/2010_12_01
http://digital.world-grain.com/sosland/wg/2010_11_01
http://digital.world-grain.com/sosland/wg/2010_10_01
http://digital.world-grain.com/sosland/wg/2010_09_01
http://digital.world-grain.com/sosland/wg/2010_08_01
http://digital.world-grain.com/sosland/wg/2010_07_01
http://digital.world-grain.com/sosland/wg/2010_06_01
http://digital.world-grain.com/sosland/wg/2010_05_01
http://digital.world-grain.com/sosland/wg/2010_04_01
http://digital.world-grain.com/sosland/wg/2010_03_01
http://digital.world-grain.com/sosland/wg/2010_02_01
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