China emerges again as the primary driver.


During the Lighthouse Chartering seminar, the Senior Manager of Bulk Research at Drewry addressed trends in imports, exports, and the production of key goods. Also analyzed were the effects of changes in maritime routes and the impact of demand for ships of various size segments on charter rates.

The market trend has fluctuated in the shipping industry, that why Raul Sharan at Bulk Research limited his forecast to five years, recognizing the uncertainty related to inactivity. Currently, the inactivity rate has reduced to 5.6%. A return to historical levels of 0.5% could result in a 5% increase in supply.

Goods supply

In 2017, there were discussions that coal would disappear from maritime trade, however, in China coal imports have increased by 60% to 70% in the last two years, and only is expected to continue.

Between 2022 and 2023, China increased its imports of metallurgical coal by 9 million tons and thermal coal by 120 million tons. But except for China and India, other major economies have reduced coal imports, while emerging ones like Vietnam, Malaysia, and the Philippines have seen an increase.

Regarding steel production and iron imports, Sharan defines it as “the basics of pulling the market together”. China reappears as a significant player, representing 4% of iron imports this year (a unique case among importers globally, considering that the EU, Japan, South Korea, and Taiwan have seen declines in iron imports). The increase in imports in China has kept freight rates stable. 

Regarding grain exports, until 2019, Ukraine exported 40 million tons of grains, however, it nearly halved after the war with Russia. This is expected to be normalized if war ends soon. As a result, Canada, Australia, Brazil, and Russia have increased their exports. 

Sharan emphasized the continuous growth of soybean imports in China, reaching 100 million tons this year, and the majority comes from Brazil and the United States, representing between 70% and 80% of total imports. He stated, “We believe that China´s demand for this product will continue to grow, albeit at a slower pace in the coming years”.

Finally, regarding the charter rates, Sharan believes that we will see an 8% increase in the fleet over the next three years due to the recent rise in new shipbuilding orders and the availability and capacity of shipyards. However, he asserts that there is a disparity between trade growth and the fleet in 2023, resulting in a significant decrease in charter rates despite growing demand. 

In conclusion, he forecasted positive prospects for utilization and charter rates in 2024, anticipating an increase that could lead to improved rates. 

November 30, 2023
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