Dry Cargo Archive

October 11th 2018

Market Forecast Modelling uncertainty

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.

October 4th 2018

The Big Picture: Soybean trade wars Bean counting

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.

September 7th 2018

Economics & Trade One to keep an eye on

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.