Average rates for dry bulk vessels are expected to be weaker than this year’s spectacular showing, but will still be at profitable levels next year, according to analysts. While demand for commodities such as grains, minor bulks and bauxite will continue to be strong, worries regarding China’s economy and real estate sector may dampen imports of iron ore and coking coal. The worries have been reflected in the forward curves, which lost steam in the fourth quarter of the year, said Braemar ACM dry bulk analyst Nick Ristic.

While he is not hugely bullish on iron ore or coal, he is positive about the other commodities, and expects that bauxite from Guinea to China will continue to be an important trade on a per-tonne basis, beneficial to capesizes. Steel trades will meanwhile benefit the smaller sizes, with the US infrastructure bill providing some import appetite. While China’s steel production slumped in the second half of this year, which was mainly politically driven in a bid to minimize pollution ahead of the Winter Olympics, a turning point could be expected in the second half of next year, he said, adding that he expects China’s steel output to recover somewhat in 2022.

He told a Breakwave Advisors webinar that what was most supportive of the dry bulk market was the muted supply growth, and “higher highs” could be expected going forward. The Energy Efficiency Existing Ship Index (EEXI), which comes into force in 2023, should have a “significant impact” on effective supply growth as vessels will have to slow down, he pointed out. Only a slight drop in speed could take out 65 capesizes from the market, he illustrated.

Norwegian owner Torvald Klaveness head of research Peter Lindstrom said that even if demand growth will slip to about 2%, it will still exceed effective fleet growth, which will provide support to rates. He expects the market to be resilient next year, although the two big uncertainties were related to China’s real estate outlook and the new strain of the coronavirus. Capesizes are estimated to average $22,000 per day next year, down from $33,000 this year, he said on a panel at the same event, adding that he was “definitely a buyer of that curve”.

Optima Shipping Services head of market analysis and intelligence Angelica Kemene expected similar average rates for capesizes in 2022, with a low of $15,000 and a high of $35,000.

Capesize owner Seanergy was however more bullish, expecting an average of $52,000-$53,000, although volatility will still be apparent. Chief executive Stamatis Tsantanis pegged the low-to-high range at about $23,000-$65,000 through the coming year.