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Dry Bulk Market – Demand Function

June 15, 2015
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Rumors of Chinese Dried Distiller Grain (“DDG”) shipment cancellations…There is talk China canceled two bulk vessels of U.S. DDGs. It is also being rumored that China could cancel as many as six more cargoes pushed DDG prices lower last week. Another source cited by Reuters said, China was simply rolling deliveries of DDGs over until October 2015 or later. Feed demand in China is sliding and cheaper soymeal prices are thought to be slowing demand for DDGs.

In any event, while this is not a good sign for dry bulk shipping, the commodity market that will determine whether there is some life in the dry bulk market is coal. Even with increases in iron ore cargoes from Australia, from a shipping demand perspective, it will be the coal market that will be the determiner of a recovery in dry bulk. The coal market is a problem and it is providing real pressure on the dry bulk market. The jury is out……

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