SSY's Elender Said Freight Rates Will Remain Structurally High
The freight market has been transformed this year, with dry bulk trade surging and lifting prices, led primarily by iron ore and grain trade, SSY Consultancy and Research director Alexis Ellender said at the Kallanish Europe Steel Markets virtual conference last week. This follows contraction in 2020.
"Overall, we are expecting the strongest annual growth in dry buck trade in percentage terms in eight years," he forecasted.
Freight rates will remain elevated on vessel shortages, increased trade, and the decarbonisation agenda of the International Maritime Organization (IMO).
Freight rates have been hiking significantly following a "vaccine-powered" recovery, Ellender commented. "We've seen industrial recovery in the world outside China with the steel sector restocking and iron ore supply growth … There has also been opportunity for longer haul coal trade from the US, Colombia, Black Sea Russia, the Far East, China and India, in particular, and Pacific activity for geared vessels has been very strong; for example, the Chinese cement trades … and iron ore from India to China."
This fast rebound has combined with fleet inefficiency that, due to bottlenecks and quarantine, has reduced carrying capacity of the fleet. The market has seen congestions at Chinese and Brazilian ports and, at the same time, Covid-19 regulations are forcing vessels to divert, implement crew changes and quarantine. This has significantly extended the length of voyages.
Meanwhile, an exceptionally strong container market and container shortages have also pushed prices up. Capesize ships had the most volatile prices, peaking at $44,817 per day on 5 May and dropping back to $30,000 per day only a month later.
A shortage of 10,000 plus dwt carriers is also expected as current order books remain particularly weak. "Even if everything on order is delivered in 2021, fleet addition will still fall significantly year-on-year", the director explained, adding there is luctance over vessel orders due to uncertainty about the regulatory outlook.
The current green transition agenda for the maritime sector is preparing a "historic transition" where shipbuilders will have to invest heavily in green fuels and technological innovation forzero-emissions carriers. The IMO decarbonization agenda intends to reduce carbon emissions per transport work by 40% by 2030 compared to 2008 and total annual greenhouse gases emissions by 50% by 2050 versus 2008.
Short comments: The transportation cost has only increased but not decreased recently, which has a great impact on the price of products. If you are interested in our drum closure, cap seal, and other products, please place an order as soon as possible.
Classification and Process Flow of Steel DrumsJune 30, 2023The steel drum is one of the traditional containers and occupies a very important position in the traditional containers. The function of steel drums has evolved from temporary storage of contents to ...view
Focus On Planning, The State Council Issues Ten Hazardous WastesJuly 1, 2022In order to thoroughly implement the decisions and deployments of the Party Central Committee and the State Council, implement the Law of the People's Republic of China on the Prevention and Contr...view
Introduction to TinplateJune 19, 2023We mainly focus on stainless steel barrels and accessories. Today, we will introduce the material of metal waterproof cover, tinplate.Tinplate, also known as SPTE, is a cold-rolled thin steel plate wi...view
ISDI: Safety Of Fusible Steel Barrel Plugs Is UnparalleledJuly 1, 2022On September this year, the Institution of Steel Drum Industry (ISDI) announced two new technologies to discuss the importance of using steel barrel fusible plugs.Kyle R. Stavig, chief executive offic...view