The recent increase in dry bulk freight rates during January was unusual compared to typical trends. However, the current slowdown is expected for this time of year. Allied Shipbroking, in its recent weekly report, highlighted the strong start of the dry bulk market in 2024, especially when compared to the downward trend observed in January 2023. Notably, Capesize earnings in 2023 recovered significantly from a low in February and closed the year at the highest levels since 2013.
According to Allied Shipbroking, the demand for Capesize vessels in the Atlantic region increased significantly in December, contributing to supply tightening. This imbalance was further supported by rising congestion at key ports in Australia and China, primarily due to exports bound for China.
As vessels begin to “normalize” in February and the spot market declines, exports are expected to weaken. However, congestion levels at certain ports in Australia and Brazil remain above December levels, providing some support. Additionally, there is growing demand for Capesize vessels in the Bauxite trade, which typically experiences increased exports in March and throughout the second quarter.
Overall, while the exceptionally high earnings seen in recent months may have passed, the coming weeks are not expected to mirror the challenges seen last year, according to Allied Shipbroking.
