Bulk shipping freight rates have remained unmoved as supply continued to surpass demand.
Availability of cargo vessels has exceeded demand, taking a toll on freight rates.
Slowdown in the Chinese economy is the root cause behind the inactive freight rates. The slowdown has retarded global trade in commodities, including coal and iron ore.
The recent spurt in steel production in China has also blurred hopes of improvement in shipping freight rates. Market participants expect shipping freight rates to remain at lows throughout 2016.
Current freight rates (coal cargoes)
| Route | Supramax | Panamax |
| Australia to India | 11.5 | 10 |
| South Africa to India | 10 | 9 |
| Indonesia to India | 6 | 5.5 |
Freights in USD/MT
Source: SteelMint Research
Current freight rates (iron ore cargoes)
| Route | Supramax |
| India to China | 7 |
Freights in USD/MT
Source: SteelMint Research
The cargo shipping industry has also failed to receive any impetus from the oil industry as demand for oil rigs continues to remain low; ruling out demand for cargo vessels. On 21Apr’16, crude oil prices were reported at USD 40.11/barrel.
The Baltic Dry Index was recorded at 688 as on 22Apr’16. The index is an indicator of the global freight rate movement in respect to all classes of vessels transporting all types of commodities, including coal and iron ore.
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