Market for dry bulk freight contracted in the second half of 2022 on dwindling grain export flows out of Ukraine and slumping Chinese demand. 

Going forward, dry bulk market looks to be in for a complete recovery, reads the Shipping Market Review report from Danish Ship Finance.

The current historic slump in yard commissioning cuts vessel capacity, making rates go up. The historically low orderbook of 67 million dwt corresponds to 7 percent of the existing fleet.

In the first four months of 2023, volumes climbed 0.4 percent from the same period last year. Throughout 2022, volumes dropped 2.7 percent on decreased iron ore and grain trading.

”Fundamentals now seem positive on the supply side, as the orderbook has reached new lows, limiting future fleet growth in the short term. But there is still uncertainty on the demand side, particularly for Capesize vessels, as the Chinese real estate market continues its plunge,” writes Danish Ship Finance in the report.

Dry bulk market experienced a historical upswing in 2021, propelled by state aid schemes and governments’ attempt to bolster economies during corona lockdowns. Rates have been on a downward spiral throughout 2022.

English edit: Simon Øst Vejbæk