With the arrival of the peak season of grain exports in South America and the strengthening of the demand for raw materials in China's economic recovery, the BDI index has risen for nine consecutive days to break the 1000 point mark.
On March 1, the Baltic Dry Bulk Freight Index (BDI) rose 109 points to 1099 points, the highest level since January 10, with a daily increase of about 11%. Among them, the Baltic Cape of Good Hope bulk carrier freight index (BCI) rose 200 points to 929 points, with a daily increase of about 27.4%, rising for the eighth consecutive trading day. The average daily profit of Cape of Good Hope vessels increased by $1661 to $7703, driving the BDI index to continue to rise.
On the same day, the Baltic Panamax Bulk Index (BPI) rose 94 points to 1515 points, a 10-week high, with a daily increase of about 6.6%. The average daily profit of Panamax vessels increased by 849 dollars to 13634 dollars. The Baltic Sea ultra-flexible bulk carrier freight index (BSI) rose 51 points to 1156 points, or 4.6% daily.
Industry insiders pointed out that the two new environmental protection regulations came into force this year. Many old ships that did not meet the regulations needed to slow down or exit the market. The number of ships decreased in disguised form, and the delivery of new bulk cargo ships was very limited. Therefore, the market rebounded very fast. The BDI index rose 66% in the past week, and 107% since the low point of 530 this year.
In the case of limited supply, the market demand has rebounded significantly. March is the peak season for grain exports in South America. After China's deregulation, domestic demand has recovered, driving the demand for various raw materials such as steel.
According to the data, the main transport capacity demand of the global bulk cargo market is 29% of iron ore, 23% of coal and 10% of grain, of which China's iron ore imports account for about 70% of the world, coal imports account for 20% of the world, and grain imports account for about 30% of the world, dominating the entire bulk cargo market.
In the dry bulk shipping industry, China is the largest buyer in the global bulk shipping market, and the proportion of imported bulk cargo to the total volume of global bulk shipping is 46% (in 2021, Clarkson data). Among the three dry bulk cargoes of iron ore, coal and grain, China contributed 76% of the global demand for iron ore and 13% of the demand for coal.
Some experts said that this wave of BDI surge was mainly due to China's unsealing and the recovery of the real estate market, which strengthened the demand for iron ore and increased the transportation demand of cape ships.
In the medium term, there are three main reasons to be optimistic about the market demand of bulk carriers: first, the Russian-Uzbekistan war has increased the tonnage of bulk carriers in the sea, and ships need to bypass; Secondly, China's import and export volume rebounded after the release of the seal; Third, the shipyard has taken a large number of orders for LNG ships and container ships in the first two years, so the available delivery time for bulk carriers is quite limited.
According to Clarkson's prediction, the volume of bulk cargo transported by sea is expected to increase by 1.3% and 1.9% in 2023 and 2024. Among them, iron ore, coal, grain and small bulk cargo are expected to increase by 0.1%, 2.1%, 5.0% and 0.6% in 2023. Clarkson expects the bulk carrier freight rate to bottom in the first quarter, and then gradually rise in the third quarter.
Experts said that the rebound of this wave of maritime transport was mainly driven by the stronger demand for raw materials in China, rather than the recovery of terminal consumer demand. Therefore, the recovery of bulk carriers will be faster than that of container ships.
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