CONF: Q4 BDI to be buoyant on more iron ore, fewer ships
Source: Mysteel
Sep 27, 2019 14:30
“Iron ore stocks (in China) has been on a downtrend since March 2018…and (as of now) the total iron ore stocks at ports declined by 30% from its record high to some 120 million tonnes,” he said, anticipating the decline to come to an end and restocking will soon emerge.
Together with a mix of negative factors including Vale’s tailings collapse in late January, the global Baltic Dry Index (BDI) plunged early this year and hit its nearly three-year low of 595 basis points on February 11, and for the first five months, the BDI averaged 841 basis points, Huang added, but the index has been gradually recovering since June and already returned to 1,963 basis points as of September 26.
On the other hand, the availability of dry bulk vessels shrank as some carriers have been idled so as to install the desulphurisation facilities to meet the regulation of International Maritime Organisation (IMO) on lower sulphur fuel and emission, according to Huang.
Meanwhile, 10% of the total 11,798 dry bulk carriers are idled, being installed with a desulphurisation tower, among which, 17% of the 1,740 Capesize vessels are suspended operations for the installation, Huang shared the statistics in his presentation.
Starting January 1 2020, the IMO requests international marine fuels should be with sulphur no higher than 0.5%, down dramatically from the existing 3.5%, Mysteel Global understands.
“The new IMO regulation will affect about 1-2% of the world’s dry bulk shipment capacity,” estimated Li Chengshan, Director of Clarksons Platou Asia Limited Shanghai Representative Office at the conference.
It is comparatively cost-effective to install desulphurisation tower than to shift to lower sulphur fuel, but the availability of such towers is limited, unable to cover all the affected vessels, and the number of shipyards is also limited to conduct the installation works all at once, Li added.
Written by Sean Xie, xiepy@mysteel.com
Edited by Hongmei Li, li.hongmei@mysteel.com
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