The bulk sector is currently exiting a difficult period, but according to the Association of Bulk Terminal Operators in order to achieve a complete market correction there will be more even more challenges.
Frachtcontor Director Frank Grone noted that while the bulk segment is working its way out of a difficult period, a 60mdwt was scrapped in 2015 and 2016 at “ridiculous prices”, while financing banks took serious “haircuts”.
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In order to achieve recovery, a healthy growth in demand is needed, which in 2017 was about 4% with 3% expected for this year.
In addition, congestion and slow steaming played a big role in the, but a 3 to 4 knot increase in speed could reverse the upturn, Mr. Grone warned.
A for bulk commodities, demand for iron ore has been very important, but the iron ore market should increase by about 2% this year and continue upwards with suppliers in Brazil and Australia ramping up production.
In summary, Mr. Grone believes that growth looks positive and fleet growth manageable but there are a number of challenges.
These can be the trade trade war between China and the US, which, will affect the shipping market negatively.
Another area of uncertainty is the 2020 sulphur cap. Speaking about measures to comply, Frank Grone estimated that 66% of all fuel burned will have to be switched by 2020 to comply with the rules.
