Dry bulk trades are extremely important in the shipping industry, and seaborne commodities are significant contributors to the growth of the world economy. There are three major dry bulk commodities:
- Iron Ore
- Coal (Steam Coal and Coking Coal)
Iron ore and coking coal are the raw materials for steel, the main material used in the construction and manufacturing industries. Steam coal is the main energy source for generating power.
Grain is the most important commodity for the food industry. Another category of dry bulk cargoes are termed minor bulks, and they include sugar, agricultural and forest products, steel products, cement, etc.
There has been a continuous increase in the trade of the three major dry bulk commodities. Specifically, the iron ore trade, the largest trade in the dry bulk market, was 516 million tons in 2003, and by 2011 It had increased to 1,052 million tons. In 2013, the trade-in iron ore reached 1,174 million tons. The total coal trade was 601 million tons in 2003, and in 2013 it increased to 1,122 million tons. The total trade in grains in 2003 was at 272 million tons, and in 2013 it increased to 335 million tons. The biggest importer in iron ore is China, which was expected to import 779 million tons of iron ore in 2013, mainly from Australia, which is the biggest exporter of iron ore, with 542 million tons in 2013. The biggest importer of coking coal is Japan. Just like iron ore, the biggest exporter in coking coal is Australia. Japan is a major importer of grain and Argentina has been one of the countries considered to be a major exporter.
Capesize vessels are dry bulk carriers that move large quantities of iron ore, coal, and other commodity raw materials. The size range of Capesize vessels is 100 to 200,000 DWT.
The main routes for Capesize vessels include Tubarao-BeilunBao (ore), Tubarao-Japan (ore), Richards Bay-Rotterdam (coal), and Queensland-Japan (coal). The average annual freight rates for all the Capesize main routes have fallen since 2008 due to the global economic recession. For instance, in 2008 the average freight rate for a 165,000 DWT Capesize vessel on a trip from Tubarao to China or Japan was around $60 per ton whereas in 2012 it was less than $20 per ton.
Panamax is a dry bulk carrier-capable of transiting the Panama Canal that mainly transfers coal or grain cargoes. The size range of Panamax ships is 60,000 to 100,000 DWT. The main routes for Panamax trades in coal include US Gulf-Antwerp/Rotterdam/Amsterdam (ARA), New South Wales (NSW)-Japan. Average freight rates have fallen in recent years for all major routes.
Handymax ships are used for less voluminous cargoes. These smaller ships usually have their own cranes for loading and are used for small ports with limited infrastructure. The size range of Handymax ships is 30,000 to 50,000 DWT. The main trade routes include Europe to the Far East, Atlantic round-voyage, and Pacific round-voyage. As with all dry bulk carrier routes freight rates have fallen significantly over the last five years.
Handysize is a dry bulk carrier that is particularly adaptable for entering smaller ports for cargo operations. The size range of Handysize vessels is 10,000 to 40,000 DWT. A Handysize bulk carrier usually carries agri-bulks, metals and minerals, and general cargo. The main routes for Handysize trades include UK Continent -Mediterranean, East Coast South America-West Coast South America, and Far East-Gulf/West Africa. Handysize rates decreased further in 2012 compared to previous years. The one-year time charter rate for a 30,000 DWT vessel began the year at an already relatively low level of $9,750 per day and then decreased continuously to reach $7,852 per day by the end of 2012.