Ocean freight outlook for the seaborne coal trade market
During 2015 the ocean freight market for dry bulk commodities has seen probably the lowest ocean freight rates since the late 1980s. The outlook for the seaborne dry bulk (SDB) trade presents large number of uncertainties as it has entered into a lower growth rate stage. The SDB trade is expected to growth at 1.4% pa during the next five years, which contrasts significantly with the past 13 years where the SDB trade grew at an annual rate of 6.8%. The reduced growth rates are mainly caused by a lower demand for iron ore in China, which has averaged 16% pa in the last ten years, and now are expected to fall to 3% to 4% in the middle term. We are forecasting that SDB trade will growth at 2.8% during 2016 and 2017. Low ocean freight rates continue to be the result of an oversupply of vessel capacity.