Firming market despite poor outlook for the domestic grain harvest

After several years of poor demand in dry bulk shipping, the market is now showing significant growth on the demand side. The signs of a firmer market have been visible since the late summer, and the speed has been picking up ever since. Although grain Exports from Finland are likely to decline since up to 20% of the harvest will be lost due to extremely bad weather conditions, total demand in our trading area is likely to increase. Undoubtedly the reason for stronger demand is to be found in the good economic growth, which has finally also reached Finland.

After several years of poor demand in dry bulk shipping, the market is now showing significant growth on the demand side. The signs of a firmer market have been visible since the late summer, and the speed has been picking up ever since. Although grain Exports from Finland are likely to decline since up to 20% of the harvest will be lost due to extremely bad weather conditions, total demand in our trading area is likely to increase. Undoubtedly the reason for stronger demand is to be found in the good economic growth, which has finally also reached Finland.

It’s also well known that due to the long recession in the shipping industry, newbuilding activity has been low, which means the supply of suitable tonnage has decreased during the last years.

Although strong market volatility is typical in shipping, many experts with an insight in shipping claim that this upturn is on a more sustainable basis, while current economic growth is broad-based and predicted to continue in the next few years. Unfavorable weather conditions in the past weeks and the upcoming winter season (reduced intake due to winter load lines, ice restrictions, more time-consuming cargo- and cleaning operations etc.) will most likely contribute to further boost the freight market.

We have prepared for the winter as well as for the hopefully increasing demand, and supplemented our fleet by chartering a couple of new ice-classed vessels. The fleet for the upcoming year will be presented in more detail in our next newsletter, but we can reveal that we’ll have an appropriate coverage in the 4000 as well as the 3000 tonner segment.

Beppe Rosin
Vice Managing Director, Meriaura Ltd.

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