Key Takeaway
The freight rates during H1 2020 plummeted to levels below operating expenses reflecting a challenging dry bulk market. The magnitude of the market disruption was so significant that the Baltic Capesize index ((BCI)) was trading in negative territory for quite a few weeks in Q1 2020.
Nevertheless, looking into H2 2020, I expect strong demand for dry bulk shipping on the back of the following reasons:
- China’s multiple fiscal measures to stimulate its economy coupled with the low iron ore inventories in the Chinese mills.
- Brazilian production has been stabilized with Vale (