Commodity Shipping Rates Are Surging and Rally Isn’t Over
Bloomberg
2 hrs ago
(Bloomberg) --
For a glimpse of how quickly and unevenly economies are recovering from the pandemic, look no further than the market for shipping raw materials.
Rising demand for everything from soybeans to steel has sent the cost of hauling dry goods soaring more than 50% this year. Manufacturing, which first picked up in China, is now accelerating elsewhere, and countries are stepping up commodity purchases to rebuild stockpiles after running them down during lockdowns that slowed port operations and hit economic activity globally.
Analysts say the rally isn’t over, with rates to carry unpacked commodities like grains, iron ore and coal -- known as dry bulk -- expected to remain high this year and possibly into 2022. That’s a stark turnaround for a market that slid to a four-year low less than 12 months ago, and comes amid a tight supply of vessels. It’s also happening as the uneven recovery scrambles movements of ship containers, which carry everything from furniture to packed commodities like coffee and white sugar.