Dry bulk rates were mixed last week, with capesize rates declining while rates in the other segments all increased. Of note, though, is that capesize rates were basically flat on Friday and capesize FFA values also found significant support during the second half the week. Going forward, we remain bullish for the overall dry bulk market for this year. The spot market has slowed due to the Lunar New Year holiday, but the recent surge in Chinese grain purchases has added bullishness to the market. The United States Department of Agriculture has also raised its overall global grain trade projections even higher.
If Chinese coal import demand surprises on the upside this year (we are already bullish), there is a good chance that 2021 could end up as one of the best dry bulk markets in recent memory. China’s economy continues to fare very well. As we have also discussed in our most recent Weekly China Report, new lending has set yet another record in China as well. The global economy of course also remains poised to recover from last year’s coronavirus-induced malaise, and newbuilding deliveries also remain set to fall further. Already, January has ushered in a welcome sign with delivery volume marking the lowest January volume seen in over a decade.
Approximately 44 dry bulk newbuildings were delivered last month. This is 16 more than were delivered in December. Last month saw the delivery of 5 handysize vessels, 9 handymax vessels, 16 panamax vessels, and 14 capesize vessels. In comparison, December saw the delivery of 4 handysize vessels, 7 handymax vessels, 5 panamax vessels, and 11 capesize vessels. Also of note is that approximately 12 dry bulk vessels were scrapped last month. This is 1 less than were scrapped in December. Last month saw the removal of 1 handysize vessel, 5 handymax vessels, 4 panamax vessels, and 3 capesize vessels. In comparison, December saw the removal of 3 handysize vessels, 5 handymax vessels, and 7 capesize vessels.
Last month’s delivery volume has marked the largest amount seen since June. Overall, it is extremely common for dry bulk newbuilding delivery volume to jump in January. What is particularly encouraging for this year, though, is that January’s delivery volume has marked the lowest January delivery volume seen in over a decade. As we have continued to discuss in our work, 2021 is set to see a continued decline in dry bulk newbuilding delivery volume. Combined with global seaborne trade prospects also remaining quite positive, this year's outlook for dry bulk shipping rates remains encouraging.