OWNERS of dry bulk ships could enjoy positive market conditions through the northern autumn, market analyst Maritime Strategies International says.

July was reported to be another positive month for the dry bulk sector, with average monthly spot rates rising to their highest level this year for all benchmark vessels, according to MSI’s HORIZON Monthly report.

Resurgent seaborne iron ore markets that provided a boost to earnings in June showed signs of slowing in July with Australian exports declining from high June levels and Brazilian exports falling just over 5% month-on-month.

Stockpiles of iron ore at Chinese ports have recovered partially from long-term lows in early June, up by 8% in early August.


However, delays at ports (particularly those in China) are absorbing tonnage.

Data from Refinitiv show that vessels are waiting 61% longer on average at key Chinese ports.

“Port delays are partly related to robust trade, iron ore in particular, partly due to poor weather and slower operations due to COVID-19,” said MSI dry bulk analyst William Tooth.

“COVID has also driven inefficiencies in vessel operation; several vessels bound for China have recently diverted to the Philippines to change crews, lengthening voyage times and reducing the available fleet.”

Inefficiencies related to COVID-19 should revert closer to ‘normal’ levels as restrictions to the movement of people, goods and business operations.

“With regards to the short-term fundamentals outlook, MSI is positive for Q3, with demand underpinned by robust iron ore trade in particular, more than offsetting weaker coal trade, however we expect a downwards correction from current strong earnings,” Mr Tooth said.

“As we head into the fourth quarter, the downturn will be partly driven by the cumulative effects of strong supply growth this year, and an expectation that fleet efficiencies ease.

“However, if sustained for a longer period, these fleet inefficiencies would continue to represent upside risk.”