Bulk carrier market outlook(2023/2024)

1. Demand

 

The iron ore trade volume, which reached 1.5 billion tons in 2021, decreased to 1.48 billion tons in 2022, and is expected to decrease in 2023 as the economic downturn is reflected. The iron ore trade is expected to increase again in 2024.

 

Except for the five major cargoes, the increase in the volume of minor cargoes is also expected to slow down in 2022 and 2023.

Therefore, looking at the annual rate of increase and decrease in the volume of trade, it is expected to decrease to -0.5% in 2022, then slightly increase to 1.4% in 2023 and 2.1% in 2024.

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2. Supply

Looking at the supply side, it can be seen that the increase in bulk carrier delivery volume has been continuously decreasing from 2020. In particular, a negative change is detected from 0.5% in FY2023 to -0.1% in FY2024.

In addition to simple delivery, scrap will increase when IMO2023 (EEXI, CII) goes into effect, and the absolute supply is expected to decrease further.

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3. Demand and Supply change rate

Looking at the graph of demand and supply increase/decrease by year above, it can be seen that in 2023, although supply decreases but demand increases relatively significantly, a market dominated by demand is formed.

In addition, it can be seen as an investment point that the gap appears larger in 2024 than in 2023.

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4. BDI Trend

Compare with graph 3. In 2020, the BDI was below 2,000 points (demand <supply), and in 2021, it rose sharply to more than 5,000 points (demand > supply). Again, in 2022, it can be seen that the trend is falling below 2,000 points (demand <supply).

 

Looking at the same pattern, it can be predicted that in 2023 and 2024, BDI will definitely show an upward pattern in terms of demand > supply.

 

However, as the global economic contraction continues and iron ore trade volume is slowing due to the slowdown in China's economy, it is advisable to invest when such signs of global economic recovery appear.

 

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