2021’s improvements in dry bulk shipping spell good news for smaller players
Various industry veterans examined the recent developments of dry bulk’s performance, and expressed enthusiasm for the sector’s recovery – thanks to the increased construction projects.
Driven by construction sector
Louisa Follis, Divisional Director for Dry Cargo at Clarksons Platou Asia, said at a Marine Money webinar: “Average earnings for capes are up more than 300 per cent even with the recent correction. For the rest of the dry bulk fleet we are looking at growth in year-on-year average earnings of about 200 per cent, which are strong levels for the dry bulk sector.”
Noting the demand came from Asia’s construction sector, Follis remarked this is pivotal in dry bulk’s making up for lost time in 2020. The improved construction sector will jumpstart employment, and most importantly propel steel and cement demand. “We are experiencing real growth in seaborne trade for construction materials in Q1 this year compared to Q1 last and for Q2 its even stronger. We are pretty much on track to see the 2019 volumes,” she added. That however is not a basis to assume all is well given Asia is not out of the woods for the pandemic yet.
A big opportunity for smaller players
William Fairclough, Managing Director, Wah Kwong Maritime Transport, saw an opportunity for smaller vessels. He noted that the latter had help from the container market, which is going through the biggest boom in history with a severe shortage of capacity. “They are having all sorts of cargo that would have been in boxes a year ago,” he said. Massive shortage of boxes is a known fact and shippers are struggling to have their goods loaded for deliveries. However, the prices are making it almost impossible for shippers with lower quantities.
Hence, opting for more economical alternatives would be a financially-wise move for charterers. Shipping giant, Maersk in their advisory also hinted of the same approach. In their recent advisory, Maersek warned that empty supply of 40’ containers is negatively impacted. The company is encouraging shippers to switch to 20’ containers in Yantian and Shekou. Charterers and cargo owners are encouraged to source for their vessels through Marine Online’s platform. It has a listing of real-time vessel data to facilitate cargo owners’ quick and informed decisions for their delivery schedules.
Marine Online Media Team
Please email us at firstname.lastname@example.org to contact the author for this article.