Commodities boom sends bulk shipping costs to decade highs

28 May 2021

Massive Chinese demand for iron ore, recovering manufacturing in the rest of the world, and under-investment in new vessels in recent years have all contributed to a sharp increase in prices for dry bulk carriers that transport unpackaged raw materials in large volumes. Capesize vessels with an average capacity of 180,000 deadweight tonnes are costing $41,500 a day for immediate hire, almost eight times last year’s average. The trade dispute between China and Australia has also tied up vessels with coal outside the ports of the world’s largest commodity importer. With the rising demand and short supply, analysts are predicting the capesize vessels to cost up to $100,000 a day by the end of the year. It is unclear, however, if this will turn into a long-term trend. While some claim this is a start of a new supercycle, others argue that there is a lack of a sustaining force like the rise of China, which drove the last period of high prices.

Read the full article on the Financial Times website.