The two shipping markets leading the post-pandemic charge are, undoubtedly, dry bulk carriers and container ships. In its latest weekly report, shipbroker Intermodal said that “the first half of 2021 has brought a very sharp and continued recovery in the dry bulk market and while many where expecting a relatively strong market, very few anticipated the levels we have seen to date. While both supply and demand forces have acted favorably, the rebound of dry bulk freight rates to multi year highs was primarily demand led. A synchronized record high economic stimulus across the globe, led by China, in order to prop up the economies from the COVID-19 shock was the major catalyst. The multiplier effect in dry bulk commodities demand came in V shape and materialized into a counter seasonal freight surge to multiyear highs throughout the 1H2021. Furthermore, quarantines related to COVID-19 and elevated congestion have led to fleet inefficiencies across basins, which along with a decelerating dry bulk fleet growth have helped to further tighten the demand supply balance. On the new building front, ordering has been moderate – similar levels with 2020 – steel price surging and solid demand has led Builders to increase their prices, which refrained owners from turning to new buildings”.

According to Intermodal’s SnP Broker, Mr. Theodore Ntalakos, “the global container shipping industry has also recorded a long-awaited increase in demand. An unprecedented shortage in containers amid surging demand for consumer goods since the pandemic started has sent container freight rates to record high levels. Also, port congestion and logistical disruptions exacerbated by the Suez Canal incident have contributed to the surge.

With global GDP growth projections revised to 6.0% and savings rates still high, the multiplier effect on container rates should continue in the medium term. Demand will eventually normalize as consumers’ preferences shift back to services with the economies reopening, but freight rates are expected to remain elevated despite a potential gradual softening from record highs. The turning point will be when high trade costs spill over to prices of final goods and inflation starts hitting consumers’ income. For the time being, global manufacturing PMIs stand at multi-year highs and assuming that we have reached the mid-cycle in PMIs as many analysts have signaled, there will be a lag factor in demand reaction from surging trade costs. We do observe an increase in NB activity (see graph) with orderbook now close to 17% of the fleet, which is not expected to impact the market with accelerating fleet supply growth until later in 2023”, Ntalakos concluded.

Meanwhile, Intermodal commented on the dry bulk market that “the Capesize market continued to pave the way for a very strong dry bulk market with the rest of the sizes also noting significant w-o-w rate improvements. The BDI today (22/06/2021) closed at 3,119 down by 94 points compared to previous Tuesday’s (15/06/2021) levels. The crude carrier market ended last week with small gains. However, with T/C earnings remaining very low it will need more than a week for the market to return to healthy levels. The BDTI today (22/06/2021) closed at 615, an increase of 32 points, and the BCTI at 452, an increase of 2 points compared to previous Tuesday’s (15/06/2021) levels”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide