Out-of-seas overcapacity is exaggerated

Thanks to the massive increase in steel stocks by Chinese steel companies and the slowdown in new ship deliveries, freight revenue has approached the daily $30,000 mark for the first time in nearly two years.

The agency analysts Frode Morkedal and Herman Hildan pointed out that under the boost of the recent wave of growth, the freight rate rose by as much as 100% in the past one month, which fully proves that “the view of structural oversupply is wrong”.

In a report this morning, they wrote, "According to RS Platou Economic Research, the utilization of the Capesize vessel may have increased by 5 percentage points in the past month."

“Although this is said, based on the estimated growth rate of supply and demand, it is difficult to continue the high level of support for the Haishu-type freight rates. However, on the other hand, such fluctuations in freight rates can be a strong testament to dry bulk freight. The excess capacity of the market is not as serious as some people think."

According to the statistics of Platou, a total of 9 new Capesize-type ships were delivered in the past month, and only one ship was dismantled.

For this, Mordecal and Hildan believe that the above increase is not enough to compete with the 1,430 ships that are operating around the world.

On Friday, the revenue from Haitang-type freight rates climbed to $29,600 per day. According to investment bank Jefferies, this is the first time since 2011 that it has reached the $30,000 mark.

Analyst Johnson Leung analyzed in a report, “We believe that part of the reason for the increase in freight rates is that China’s confidence in economic recovery has increased, and as a result, it has started to increase its inventory. In addition, seasonal factors and continued slowdown in capacity growth are also Which is the main reason."

He believes that the gap between Haishu-type and small-scale shipping rates has reached the "ultimate point."

So Leung is worried that the market is now standing at a watershed - or the sea-jaw-type rally will stop, or small boats must catch up.

In addition, ICBC analyst Moses Ma pointed out that the rebound of the Baltic Dry Index (BDI) was mainly stimulated by short-term factors, including speculation in the FFA market, Chinese steel companies increased their inventories, and Chinese industrial production accelerated. Growth and so on.

However, Moses Ma believes that there is still excess capacity, so the dry bulk market is not yet ripe for announcing a turning point.