Suzhou Cosc Marine Machinery analyses that, driven by continuous growth in dry‑bulk trade, available market tonnage is continuously securing shipping contracts. Freight rates for vessels on major global dry‑bulk trade routes are expected to recover, and the dry‑bulk vessel market is poised for a bottom‑out rebound.
Suzhou Cosc Marine Machinery states that Japan has decided to increase coal‑fired power generation, while the Chinese government plans to cut domestic coal production capacity. Demand for coal‑carrying vessels will keep rising over the coming quarters. Furthermore, Suzhou Cosc Marine Machinery points out that China’s macroeconomic policies have exerted significant impacts on the overall dry‑bulk market, boosting vessel demand on key trade lanes and supporting a steady recovery in charter rates. In addition, China’s economic revival will facilitate a rebound in iron‑ore trade volumes and is likely to further lift seaborne shipping demand. A recovery in Brazil’s commodity trade volumes is also anticipated.
On the investment front, Suzhou Cosc Marine Machinery holds that stricter financing terms and contained new‑ship orderbooks will help keep dry‑bulk tonnage supply under control. Delayed deliveries and order cancellations for numerous vessels are expected to postpone substantial growth in dry‑bulk vessel deliveries in the years ahead. Scrapping of relatively young vessels will also slow fleet expansion. Moreover, vessel scrapping and new‑ship deliveries over the next twelve months are projected to ease market over‑tonnage pressures.
Unlike the downturn in the dry‑bulk sector from late 2015 to early 2016, recent growth in market demand is set to bring about a bottom‑out recovery for the dry‑bulk market. Suzhou Cosc Marine Machinery forecasts that rising iron‑ore shipping demand on the Brazil‑China and Australia‑China routes over the next two quarters will underpin stronger demand for Capesize vessels. Nevertheless, the re‑entry of laid‑up vessels into the market may undermine the anticipated improvement in freight rates.