Page 145 - ΝΑΥΤΙΚΑ ΧΡΟΝΙΚΑ - MARTIOS 2023

FREIGHT MARKETS

DRY BULK MARKET:

OUT OF THE MOUNTAIN OF

DESPAIR, A STONE

OF HOPE*

*Extract from Martin Luther King, Jr.’s “I Have A Dream” speech, Washington, DC, August 28th, 1963.

Rough start to the year volume interrelated to a relatively mild community to accommodate grain reopening and its retrieving Covid-19
When contemplating the, admittedly winter in the Northern Hemisphere transportation, Ukraine’s agricultural cases, also reflected on projections of
rough, start to the year, it is important which limited the energy needs of most exports in the 2022/23 season up the IMF for an annualised 5.2% China
to also reflect on how the previous year coal importing nations. to mid-February have been down by GDP growth in 2023.
ended; in 2022, China managed a mere Further, the medium-sized bulkers nearly 29% y/y. For the time being, forecasts for Chi-
3% growth in its GDP, registering one have been impacted by a late Brazil- The UN-brokered Black Sea Grain nese demand for steel and iron ore
of its worst performances in nearly half ian grain harvest which affected the initiative has encountered a number remain relatively discouraging: in 2023
a century and same was reflected on actual commodity supply, leading of challenges including safety and the Asian behemoth is forecast to see
the Baltic Dry Index with its downward their average earnings in February to insurance, while Russia has been its steel demand contracting by 1.1% y/y
spiral carried over in 2023. mid US$8,000’s/d for Panamax and low repeatedly accused of intentionally to 910 million tonnes and its iron ore
Dry bulk market participants witnessed US$8,000’s/d for Supramax bulkers. delaying inspections of vessels carry- exports down by 2.7% y/y to 1.07 billion
spot rates bottoming to nearly 3-year It is indicative that during the first three ing Ukrainian grains, creating backlog tonnes.
lows when on February 16th, the BDI weeks of January, the daily average of in the region and averting traders from Of course, much will depend on how
was published at 530 points. Seasonal Brazilian soybean exports were lower upping shipments’ volume. the government and local banks will
weakness, retrieving port congestion, by 67% compared to the same period On a positive note, the month of Feb- choose to support the property sector
extensive Covid-19 lockdowns and last year as the pace of the South ruary close with an upward trend for and set in motion infrastructure-inten-
China’s lingering property crisis, all American harvest has been particularly the freight market across all bulker sive projects as the year progresses.
weighed on the country’s economic slow, affected by heavy droughts during sizes as the physical market regained And while 2022 was the first year on
performance and reverberated on the the planting season last summer. some ground and showcased a notable record when new construction activ-
dry bulk freight market. That said and as we have entered the turnaround, also supported by a green ity and land sales in China declined,
Subdued demand for steel, and there- last month of Q1, grain shipments forward curve. in January credit conditions improved
fore the raw steelmaking ingredient of have somewhat picked up pace, offer- significantly when the Chinese banks
iron ore, pushed Capesize bulkers to ing some much-needed hope for an Where to from here issued a record 4.9 trillion CNY (circa
have to run at significantly below oper- increased tonne-mile demand going Despite the still unstable global geo- US$ 720.21 billion) in loans, in an effort
ating cost for the entire month of Feb- forward. political landscape and a number of to galvanise the country’s economy.
by Sevi Katemoglou, ruary, averaging at upper US$3,000’s/d. February 24th marked one year of the challenges in various fronts, we do Home prices in China are slightly rising
Founder & Dry Cargo Shipbroker, The Panamax asset class also took a Russia-Ukraine war and despite mul- expect a recovery of the freight market, and at the same time mortgage rates
EastGate Shipping Inc
hit, largely attributed to thin coal cargo tiple efforts from the international mainly supported by China’s economic are falling (to 4% in February), while

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