Profits in the dry bulk sector have surged to multi-year highs as related demand and disruptions linger, according to Peter Sand, chief shipping analyst at Bimco.Speaking during an online event last week, Sand said dry bulk owners were heading into the seasonally strongest part of the year, having already enjoyed a very profitable year.“The dry bulk shipping industry has enjoyed a bumper year, with average earnings continuing to outshine any profits made in the past couple of years. As is often the case, Capesizes are taking the spotlight, with recent earnings peaking above $50 000 per day,” he said. “A much more consistent and stable increase has been recorded for Handysize and Supramax ships. These saw average earnings rise to $33 087 and $36 832 per day, respectively, on September 3. On the same day, a Panamax ship could expect to earn $32 445 per day.”He said time charter rates were currently underlining the strength of the market. “Charterers were paying double, if not 2.5 times more, at the end of August compared with the start of 2021. A one-year time charter on a Capesize ship at the start of the year would have brought owners $16 500 per day. By August 27, the figure was $32 750. Supramax ships have recorded the largest increase, with one-year time charter rates rising by 179.3% since the start of the year to $29 500 per day.”Sand said the high freight rates could be partially attributed to the restrictions and problems experienced at ports due to the global pandemic. “Ships are simply tied up at ports for longer than usual,” Sand explained. “On September 1 there were 674 dry bulk ships waiting in China compared to the 287 ships that were waiting for the same length of time in 2019, prior to the Covid pandemic.”Sand said while it varied between shipping lines, the average time for a bulk vessel’s port stay (including waiting time at the load and discharge ports) had risen by 22.7%.Another factor that had contributed to the uptick in the market was the recent pick-up in Brazilian iron ore cargoes to China. This trade had seen an increase of more than 6% in recent months.“There has also been strong growth in grain exports from the world’s largest exporters. Grain exports from the biggest exporters grew by 6.3% to a record 162m tonnes in the first six months of the year,” said Sand. “As we approach what is seasonally the strongest part of the year for dry bulk, the market is looking promising. Operators have already been recording solid profits so far this year. The congestion that is draining the market of capacity will continue to support earnings in the dry bulk market.”
