The dry bulk market has remained down despite some indications of a hesitant recovery during last week’s activity. An increase in iron ore cargoes from Australia and Brazil helped the Capesize market break free of the slump it had been stuck in since mid-July, according to shipbroker Allied Shipbroking’s most recent weekly report. Given that we had a week-over-week rise of over 17% from Australia and just over 32% from Brazil, this jump in shipments was noteworthy. The market, however, continues to hold because this beneficial influence is still in its infancy and too early to be classified as a trend change.
“At such low-performance levels, it is logical for the general market mood to have taken a substantial knock in recent months,” says George Lazaridis, Head of Research & Valuations at Allied. While there is still a fair amount of market risk resulting from the subpar economic indicators coming out of the G20 economies, particularly about what to expect during the last quarter of this year and the first quarter of 2023, there is also some uncertainty when looking at the overall demand-side fundamentals. Many in the market are still clinging to the gains made during the severe downturn that was observed throughout the second half of July and almost all of August. “Despite everything, it appears that the remainder of the dry bulk market is doing considerably better.
The grain, coal, and other minor bulk trades continue to benefit from supply chain interruptions, but the smaller size sectors have fared considerably better. Their rates have remained reasonably buoyant up to this point, while also seeing a significant decline since May. The reality is that despite the overall negative pressure brought on by the deteriorating global economic conditions, favorable tailwinds are still operating somewhat in their favor. As a result, the whole attention is now firmly focused on what kind of relief initiatives central governments will do to combat skyrocketing inflation, protect consumers, and prevent the worldwide recession we are now appearing to be headed into. Allied’s analyst concluded.
