Project Description


The Baltic Dry Index rose from approximately 4000 all the way up to past 5000 points during September. This was not far off the peak of the market. It’s therefore interesting to look at the cargo drivers. The really interesting thing is when you look at tonne mile demand, September fell by 2%. So why has demand fallen and freight rates increased so sharply?

Well, the obvious answer is inefficiencies due to congestion and covid 19. This demonstrates freight rates are not purely supply and demand driven. However, what is interesting is iron ore has maintained its strength in September and is similar levels to last year. Growth in the third quarter came from Brazil which grew 21% on a tonne mile basis from the previous quarter, while Australia volumes remained stable.

Coal Demand is 11% higher than September last year. Equally, agriculture is down 18% compared to last year. The third quarter also saw a scramble for coal resources, with India surprisingly losing out with a 33% fall in their coal imports, while Japan grew 40%. Total coal volumes grew 4% in the third quarter and in September they were 81 million tonnes, which is the highest volume of thermal coal shipped this year.

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