In those days, the international dry cargo market has climbed sharply. The Baltic Dry Index closedon the 2,011 points on July 16, breaking through 2,000 for the first time since January 6, 2014; On July 22, it closed on 2,191 points, increased by 268% compared with 595 points on February 2019. The soaring BDI enables the shipping industry to make profits as well as delivering many developments. However, insiders said that the recent trend of BDI is related to short-term factors such as seasonal rebound and resumption of the Vale. Therefore, this climbing trend may not last long and the basic pattern of market supply and demand remains unchanged. In other words, buying ships mainly depends on the long-term market in the following days.

Is the soaring BDI a short-term fluctuation?

The BDI shows a fall and thenan increase. In the first quarter, the collapse of the Vale in Brazil and the repeated hurricane of Australia, combing with the production-cutting newsreleased by major miners, the BDI even fell to 92 points in April. However, since mid-April, the trend of BDI has gone up significantly. It broke through 1,000 points and 2,000 points on April 30 and July 16 accordingly. At present, Capesize bulk carrier revenue is almost 10 times that of three months ago. Chartering rates have reached the highest level since October 2010.

It is hard for new ship-building market to make profits.

We can describe the new shipbuilding market as a miserable one. The statistics issued by Clarkson Research Services Limited demonstrated that there are 360 ships in global new orders, a 39%year-on-year decrease in compensated gross tonnage. Among them, the new orders for the three main types of bulk carriers, oil tankers and container ships were reduced by 55%, 47% and 58% respectively in compensated gross tonnage.

The optimists believe that itwill generate the needs of building new ships in part due to the lower iron ore inventory, but also China’s economy performs stable.

The insider said that although the BDI has been climbing in the near future, the entire dry bulk shipping market is still in a low-level direction. Nevertheless, influenced by the Sulfur Limit issued by IMO, ship owners may adopt a more cautious attitude and delay investment in new shipbuilding.

There also has favorable news for new shipbuilding market. For example, the following strict environmental regulations will prompt ship owners to dismantle their old ships for reducing the capacity of those ships. On the other hand, when it comes to the age of bulker, the global fleet is still young. In other words, ship owners are not willing to update their obsolete ships, which discourages those persons who hope the soaring BDI can bring more benefits for new ship-building market.