Subdued Demand Keeps Bulk Shipping Freight Rates Stable

Bulk shipping freight rates continued to exhibit a stable trend, with rates remaining low.

No improvement in the global economy has kept bulk shipping freight rates at lows.

Current freight rates (coal cargoes)

1. Australia to India: USD 10/MT(Supramax), USD 7/MT(Panamax)
2. South Africa to India: USD 9/MT(Supramax), USD 8.5/MT(Panamax)
3. Indonesia to India: USD 5/MT (Supramax) , USD 4/MT(Panamax)

Current freight rates (iron ore)

1. India to China: USD 5/MT(Supramax)

Global trade has retarded mainly on account of slowdown in the Chinese economy. China is the major importer as well as exporter of many commodities.

Besides, low crude oil prices have lowered demand for oil rigs, weakening demand for vessels.

As a result of retarded economic activity, shipping vessels have become surplus, triggering intense competition among shipping companies, resulting in freight rates remaining low.

The Baltic Dry Index (BDI) has lately undergone a marginal improvement to 315 points, after falling to a record low of 290 points on 10Feb’16.  The BDI is an indicator of shipping freight rates of cargoes transporting commodities like coal, iron ore, grain among others.