Highlights

  • The Baltic Exchange Dry Index (BDI) remained low in the fourth quarter due to congestion easing and weak demand in China. 
  • The IMF forecasts the global economy to grow by 2.7% in 2023 and by 3.2% in 2024, following a downward revision. In its worst-case scenario, the IMF forecasts GDP to grow by as little as 1.2% and 1.6% in 2023 and 2024, respectively. 
  • China’s economy is forecast to grow by 4.4% in 2023 and by 4.5% in 2024. However, downward risks remain, such as future COVID measures, continued uncertainty surrounding the resolution of the country’s property crisis, and the impact of a global economic slowdown on its export-oriented economy. 
  • In 2023, iron ore and coal demand should stagnate, while grain supply should remain subdued. Growth in minor bulks should weaken as global economic growth stalls. 2024 could be a more favorable year for dry bulk demand as economic conditions improve. 
  • The bulk carrier fleet is forecast to grow by 2.1% in 2023 and by 1.8% in 2024. A pick-up in demolition of older tonnage is expected in 2023 and capacity supply may be further reduced by 2-3% by the introduction of EEXI and CII.  
  • We expect sluggish growth in cargo demand of 0-1% in 2023 and higher growth in the 2-3% range in 2024. Capacity supply is forecast to reduce by 0-1% and grow by 1.8% in respectively 2023 and 2024. As such, we expect a slight tightening of the supply/demand balance in both years.