The impact of iron ore fundamentals on dry bulk freight rates in 2021

The Covid-19 pandemic was another significant headwind for the dry bulk freight market in 2020, following the Brumadinho dam disaster in 2019 that negatively affected the dry bulk market by significantly reducing the long-distance iron ore exports out of Brazil. Although there are still significant headwinds this year, we are optimistic that the dry bulk industry will improve in 2021 and 2022. As the world returns to some form of normality, trade and world GDP are expected to increase significantly. What is interesting to see at this point in the industry is the historically low order book for new vessels. The increase in world trade activity coupled with the low order book, should increase the fleet utilization and by extent provide support to freight rates.