Now that they have all been reported, we can look back on the Q3 quarterly production and sales reports from the big iron ore miners.

China is increasing its dominance of global primary aluminium production, while in the Atlantic the industry is in turmoil, a result of President Tump’s import tariffs and impending sanctions on the head of Russia’s big player, Rusal.

Year-to-date we have had 22.5 mn Dwt of deliveries into the dry bulk fleet. If we include the remaining 4.6 mn Dwt of vessels still scheduled the total hits 27.1 mn Dwt. This would be the lowest volume of deliveries in ten years and 28% down on 2017, a year that was already light on deliveries.

On the demand side of our forecast, downside risk is undoubtedly growing, but there still remains some upside potential if you know where to look. The headline economic news is not too positive, but there is enough momentum in trade flows, plus the positive impact of disruption in the market, to keep utilisation moving higher in our base case forecast.

We have been updating our forecasts and have started to incorporate much more explicitly some of our assumptions around how the market will deal with the big issues facing the industry over the next few years: IMO 2020 and the role of scrubbers and changing fuel costs, ballast water, the growth of the dedicated VLOC fleet and the phase out of the converted tankers that operate on the iron ore trades. It is of course a continually evolving story, but those who saw any of our recent presentations in Singapore will have seen how our thinking on these issues has been developing.

Key themes are covered below and will be continued next week. As ever, if you are interested to learn more, please get in touch via your broking contacts.

Since China implemented a 25% import tariff on US soybeans in July, we have seen major changes in the soybean shipping market. As the US harvests a record crop, its exports to China, the world’s second largest soybean trade last year, have ground to a halt. Meanwhile China has consolidated its dominance over Brazilian exports, displacing other buyers.

As a result, this season we are seeing new and unusual trades emerge as US soybeans fall in price and alternative export markets open up. This is likely to have a negative effect on demand in the short run, but in the long run, the changes have the potential to generate increased demand for bulkers.

Since peaking at more 550 ships at the end of June, the number of vessels waiting in ports to load or discharge has dropped by 22%, releasing 125 ships back into the market over the course of Q3, almost half of which were Capesize. This has boosted apparent supply at a time of record low vessel deliveries from the yards.

“Past performance is not indicative of future results” is the disclaimer attached to all investment advice. The same holds true for the freight market, but understanding historic trends can at the very least be a helping hand in understanding how markets might perform.

Recent economic news hasn’t been brilliant. Stock markets, commodity prices and a number of emerging market currencies have seen falls in recent weeks, just as the freight market had started to pick up. As the headwinds from the USA’s trade policies blow stronger and growth forecasts are questioned, we look at three of the main stories and what their impacts on the freight market will be. There are certainly some issues to consider in the near term, though a major impact is not part of our base case.

Last week we outlined some of the key drivers that are shaping our latest market forecast. This week we show the results of our models, with an overview of demand, supply and utilisation.