Shipping market outlook Q2 2022 - Container vs Dry bulk
Freight Rate Forecast Long Term Market Outlook Summary: Container vs Dry bulk
S&P Global Freight Rate Forecast models predicts Baltic Dry Index(BDI) to increase in the early third quarter compared with the second quarter with the restocking demand from Europe before the Russian coal imports ban and seasonal recovery in shipments as well as continued strength in commodity prices. However, the dry bulk earning to fall about 20-30% on the year to average about 2,500 - 3,000 points in second half 2022 with several downside risks, including the major supply-side impact from Ukraine-Russia conflict and demand-side impact from weaker mainland Chinese economy and stronger domestic coal production and softening container market.
We assume container freight rates will also face correction and decline by 20-30% to average about $6,000-7,000 per box (FEU) in the second half of 2022 from average about $9,000-10,000 per box (FEU) over the same period last year. The softening of the container trade growth in response to high inflation rate, endemic consumer pattern, and supply side pressure with heavy investment in newbuildings, as well as reduced congestion with the easing of COVID-19 restrictions will be major downside risks in the second half of the year, specifically after the third-quarter peak season is over.
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