The Impact of Steel and Coal Production on the Dry Bulk Shipping Market
The worldwide dry bulk shipping market is expected to grow at a CAGR of 10.10% between 2020 and 2027, growing from US$257.554 billion in 2020 to US$505.242 billion by 2027.
The most common bulk commodity is dry bulk. Iron and coal are the two major basic materials that are supplied in considerable quantities. Because of the significant rise in electricity consumption, both imports and exports of coal are in high demand. Iron demand has grown because of industrialization. Because marine transportation is the least cheap mode of transportation, demand for dry bulk shipping has increased. Considering the resources available, it is now possible to track the shipment of products across the globe by using the identification number supplied. These factors are anticipated to bring up new development opportunities for the dry bulk shipping business.
The market trend for dry bulk shipping has shifted dramatically as the shipment of steel and coal has increased. Furthermore, one of the primary drivers of dry bulk shipping market growth is the expansion in global seaborne trade.
Iron ore and coal demand has expanded because of growing industrialization and economic liberalization and is mostly met by industry through seaborne commerce. Coal and iron ore are among the most prevalent raw materials used in power generation and long-term infrastructure building. The large growth in demand for coal imports and exports has increased demand for coal exporters and importers. Such factors drive the dry bulk transport business. Fast economic expansion, population growth, rapid urbanization, and expanded steel production are all going to drive up demand for the transportation of various commodities used in various sectors.
Additionally, improvements in the system of supply chain management are hastening the automation of automobile production planning systems. Because maritime transport is the cheapest available mode of transportation, a rise in sea travel is expected to help the dry bulk shipping business. The worldwide dry bulk shipping sector is expected to be driven by increased technological improvements, such as the capacity to track shipping goods and identify individual components.
The growing coal and iron ore production will surge the demand for global dry bulk shipping market share during the projected period. Moreover, high demand for steel which in turn will positively influence the market size.
The primary drivers fueling the expansion of this market are rising trade volume and global demand for products such as iron ore and coal which has resulted in higher developments in dry bulk carriers in recent years. One of the primary reasons driving expansion in this industry is the increased global demand for coal. Because of its low cost and widespread availability, the utilization of coal as a source of energy has expanded dramatically in recent years. Furthermore, during the last decade, the worldwide seaborne iron ore trade has expanded substantially. In response to the country’s fast economic expansion, increased steel output, and worries about energy security, the government has implemented several programs to assure enough supply of iron ore for the country’s steel mills. These strategies involve import substitution as well as the expansion of native mining activities. The sheer volume of building activities in the commercial, domestic, and non-residential sectors fueled the need for steel. Because of the increased shipping of steel and coal, the share of the market for dry bulk shipping has changed significantly. Steel is in high demand due to an increase in infrastructure projects. As a result, producers use a variety of tactics and concepts to boost the value of their production to change consumers’ perceptions of the worth of their products. According to the World Steel Association, steel demand rose by 0.4% in 2022 to 1840.2 Mt. Steel consumption will increase by 2.2% in 2023, reaching 1 881.4 Mt. According to the same statistical source, China and India would be the top two leading countries in terms of steel output in 2020-21.
The rising initiatives to incorporate various strategies by companies will propel the market to grow.
The companies launched various programs and signed partnership agreements which have resulted in the growth of the market’s profitability. For instance, RightShip launched a new initiative for the dry bulk industry in April 2020, to ensure the greatest standards of safety, security, and environmental excellence. The new Dry Bulk Management Standard (DBMS) intends to assist the advancement of security and risk management standards in dry bulk ship management, as well as to foster collaboration, dialogue, and higher standards in the industry. Similarly, Roger LLC (Roger) launched a new independent technology firm in April 2020 to provide digital solutions to carriers and shippers in the dry bulk shipping market. Roger gathered a group of dry bulk truck freight merchants that collaborated with more than 200 trucking businesses to build a platform available to shippers and carriers throughout the industry to decrease paperwork and achieve maximum transportation efficiency.
During the forecast period, the global dry bulk shipping markets in Asia Pacific are projected to have a substantial market share.
The global dry bulk shipping market is divided into five areas based on geography: North America, South America, Europe, the Middle East, Africa, and the Asia Pacific. During the forecast period, the Asia Pacific region is anticipated to hold the largest amount of market share in the next five years. Due to the increased industrialization and production of coal and iron ore in the region, the market is surging. Moreover, the growing population’s need for commodities would aid the expansion of the Asia Pacific region’s dry bulk shipping market over the forecast period. For instance, Safeen Feeders, a subsidiary of AD Ports Group, established a new global dry bulk shipping service in September 2022. It agreed to acquire and manage five dry-bulk boats for 126 million dollars with Invictus Investment. Invictus’ dry-bulk trading company presently transports over three million tonnes of goods every year, mostly wheat and supplementary grains. The partnership with Invictus has helped the company to own and manage five dry-bulk boats, expanding commercial transportation to the Red Sea, Pacific routes, and other locations. Therefore, such developments made, and market expansions initiated by companies will drive market growth for this region.
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