Bulk Shipping Freight Rates Still Under Pressure on Low Demand, Excess Vessels

Over-supply of vessels and minimal trade growth continue to hamper the shipping freight rates.

There has been no improvement in shipping freight rates as the global trade scenario remained gloomy.

Of-late, freight rates of capesize vessels, carrying iron ore from Australia to China, had improved a little-bit due to increased imports on account of the recent spurt in steel production in China. But, the rates have again dipped as the imports have declined as stocks at Chinese ports have increased.

Source: SteelMint Research

Source: SteelMint Research

Freight rates in respect to India related routes are also not expected to gain in the future as coal imports into India are expected to decline this fiscal due to substantial improvement in domestic supply.

The Baltic Dry Index was recorded lower at 634 points as on 19May’16 on account of lackluster demand. The index is a measure of global freight rate movements in respect to all classes of vessels, carrying all kind of commodities, including coal and iron ore.