Strong demand for dry bulk commodities as economies recover from the global pandemic have helped to lift bulk carrier earnings, but it would be premature for owners to pop open the champagne just yet, according to shipping association BIMCO.

“Despite the current strength of the dry bulk market, fundamentally little has changed, with high demand primarily being driven by short-term factors linked to pandemic-related stimulus spending and stockpiling,” the group’s chief shipping analyst Peter Sand said. “This means that, even though volumes are currently strong and the orderbook relatively low, BIMCO is not holding its breath for the next supercycle to begin.”

“Whatever happens in the longer run, the strong start to this year has padded dry bulk owners’ and operators’ bottom lines, and with continued strong demand for many of the major dry bulk goods, this year looks set to be one to remember,” Mr Sand said.

The dry bulk market had a stellar start to the year, driven by agri-products on long-haul voyages, combined with higher iron ore from Brazil as Vale, the country’s largest miner, ramped up output following a dam breach in early 2019. Even coal volumes showed strength.

The first four months of the year had record-breaking volumes, with demand reaching 1.69bn tonnes, an increase of 6.1% compared with the year-earlier period. That is the highest ever start to a year, although it is slightly lower than the 1.72bn tonnes shipped in the final four months of 2020. Most vessel sizes were beneficiaries of the strong demand, with supramaxes topping the chart.

Demand for supramaxes increased by almost 11% in the January to April period versus the same time last year, while capesizes gained 6% and Panamaxes rose by 1.5%, according to BIMCO. Handysize demand however only grew by 0.1%.

Capesize earnings are set to have the best month of May since 2010, with an average of $36,536 per day, which is about nine times greater than the same month last year, BIMCO said. The last time average earnings were above $25,000 per day for a peak season was back in the fourth quarter of 2013.

So far this year, however, Capes have averaged $23,054 per day, based on Baltic Exchange data. Panamax earnings have meanwhile averaged $20,487 per day, while supramaxes were at $19,188 per day, and handysizes were at $18,274 per day.

On the supply side, BIMCO expects fleet growth at 2.4%, the lowest since 2016. So far this year, vessel supply has expanded 1.3% based on new ship deliveries of 16m dwt out of an expected 30m dwt and demolitions amounting to just 4.2m dwt. Ordering-wise, 92 new ships have been contracted to date, versus 111 in the same period last year. Panamax ships have proved to be the most popular with 44 ordered, according to BIMCO.