Glimmers of hope in Q1 suggest improved Q2 
Dry bulk markets emerged in early 2017 as more robust than many had expected with global growth leading experts to hastily upgrade their forecasts for the coming year. An early year revival in iron ore and coal imports to the Far East, driven by a firming in global steel prices, in addition to a recovery in niche mineral markets—notably the lifting of Indonesia’s mineral export ban—have seen a Pacific-led rebound following the Chinese New Year in early February. China’s ban on North Korean coal imports in February was also seen as an encouraging sign that Chinese coal imports would have to extend seaborne trade in order to compensate. North Korea is China’s fourth biggest source of coal, after Mongolia, with 22.5 Mt shipped in 2016 (up from 19.6 Mt the year before), thus a not-inconsiderable contributor to China’s energy mix. (p. 1)

Emerging markets return after six-year slump
Sustained growth in India’s GDP, steady near 7% in the final quarter of 2016, is also seen as an encouraging signal for eastern-based dry cargo transport growth. China and India, most notably, have moved to shift their coal sourcing away from domestic supplies and increasingly toward import shipments. The Atlantic market, while buoyed by new enthusiasm in the East, has been steady thanks to seasonal demand from South America. It remains to be seen, brokers say, whether the Atlantic will mount a similar rally as the Pacific that would con­ceivably push freight earnings to new highs where they would stay through the year, boosted by global growth. The ideal scenario for owners would be a push in Atlantic grain arriving with such strength in Q2 that it supplements the steadier Pacific market, leading to a virtuous cycle of continual earnings improvements. (p. 2)

…continue reading in today’s BMTI Daily Report.