Korea Ocean Business Corporation "Increasing Downward Pressure on Dry Bulk Shipping Market by Year-End"

'Dry Bulk Shipping Market Forum for the First Half of This Year'

The Korea Ocean Business Corporation recently held the "2022 First Half Dry Bulk Shipping Market Forum" in the conference room of the Korea Shipping Association.

[Asia Economy Sejong=Reporter Dongwoo Lee] Korea Ocean Business Corporation recently forecasted that the dry bulk shipping market will face increasing downward pressure by the end of this year due to the US interest rate hikes and the aftermath of the Russia-Ukraine war.

The corporation announced on the 25th that it held the ‘2022 First Half Dry Bulk Shipping Market Forum’ recently to review current issues in the dry bulk market and discuss the market outlook for the second half of the year.

The corporation’s Smart Shipping Information Center explained, “So far this year, the dry bulk market has been about 6% higher compared to the same period last year, and considering that last year’s market was the sixth highest level since the Baltic Dry Index (BDI), a bulk shipping freight indicator, began publication in 1999, this year’s market conditions are very favorable.”

On the other hand, it noted that external unexpected factors such as Indonesia’s temporary coal export ban earlier this year, Russia’s invasion of Ukraine, and the prolonged lockdown in Shanghai, China, have caused a high level of uncertainty in the freight market.

While ship supply has stabilized compared to the past, meaning changes on the demand side will have a greater impact on freight market conditions, it is expected that downward pressure on the dry bulk market will intensify toward the end of the year due to the US’s rapid interest rate hikes, China’s zero-COVID policy, and the effects of the Ukraine war.

During the open discussion, shipping companies’ forecasts for the dry bulk market in the second half of the year and their responses to environmental regulations were discussed.

In response to the International Maritime Organization’s carbon emission regulations scheduled to take effect next year, many shipping companies plan to implement slow steaming, but some companies have already formed task forces or placed orders for liquefied natural gas (LNG)-powered vessels as proactive measures.

However, some opinions were raised that it is premature to make concrete plans as clear guidelines have not yet been established ahead of the environmental regulations. There were also suggestions that it is necessary to proactively secure facilities capable of stable LNG supply.

This forum was held face-to-face for the first time in over two years following the easing of social distancing measures. Twelve domestic dry bulk shipping companies, including Pan Ocean and HMM, as well as industry stakeholders, attended.

A corporation official said, “Although uncertainty is increasing in the dry bulk market and the global macroeconomic environment, we plan to strengthen the mutual information network between the corporation and the shipping industry to respond effectively.”

This content was produced with the assistance of AI translation services.