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Dry Bulk Fleet Utilization Down By 3.7% During Q1 2019 - Golden Ocean

Logistic News - Published on Wed, 12 Jun 2019

Image Source: Marine Link
The negative impact of the lack of cargoes in the dry bulk market since the start of the year, took its toll in the level of the global fleet’s utilization rate, which declined by 3.7% over the course of the first three months of 2019. According to a recent analysis by dry bulk ship owner, Golden Ocean, “global dry bulk fleet utilization calculated as total demand in tonne miles transported divided by total available fleet capacity dropped by 3.7% in the Q1 of 2019, reflecting the trend observed in the rate environment. According to Maritime Analytics, global fleet utilization was 82.1% in the Q1 of 2019, down from 85.8% in the Q4 of 2018 and 85.1% in the Q1 of 2018. According to the same source, total seaborne transportation of dry bulk goods was 1,148 million tonne in the Q1 of 2019, compared to 1,142 million tonne in the Q4 of 2018 and 1,144 millon tonne in the Q1 of 2018”.

Golden Ocean said that “while the volume of cargo transported was unchanged from the Q1 of 2018, market disruptions resulted in shorter trade routes, less congestion and newbuilding deliveries added additional capacity in the Q1 of 2019. Global steel production grew by 4.2% in the Q1 of 2019, driven by strong growth from China. Chinese growth offset a 1.4% decline in steel production growth in the rest of the world. Outside of China, negative growth was observed for three consecutive months before reversing in March, led by the US and India. The strong steel production observed in China coincides with relatively low stock-piles, an indication that steel produced is being consumed. The stimuli that the Chinese government put in place in the second half of 2018 are now starting to positively impact the economy, and hence consumption of steel is keeping up and supporting the strong growth in steel production. High iron ore prices following the disruption of Brazilian exports have led to draw-downs of stocks in ports and likely also at steel mills, a trend that we observed late last year. This prolonged period of stock drawdowns should eventually reverse as volumes from Brazil normalize, which in its turn should push iron ore prices downwards and bode well for increased imports”, the shipowner noted.

According to Golden Ocean, “seaborne transportation of coal increased by almost 5% in the Q1 of 2019 compared to the previous quarter. This was a partly reversal of the drop in the Q4 of 2018 related to the cap on coal imports put in place by China towards the end of 2018 as some cargoes that were delayed and not cleared for imports at the end of 2018 were imported in 2019. Chinese electricity production continued to grow in the Q1 of 2019, increasing by 7% compared to the Q1 of 2018, and thermal electricity production grew by approximately the same amount. While Chinese domestic coal production increased at the start of this year, it has not kept pace with the growth in electricity production from thermal coal.”

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Posted By : Rabi Wangkhem on Wed, 12 Jun 2019
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