A “MAX” Change in Dry Bulk?

Vale’s recent announcement that the first of their 400,000 deadweight “Chinamax” bulk carriers will roll out in the fourth quarter 2011 has raised some interesting comments in the dry bulk market. Drewry reported the deliveries will be the largest influence in dry bulk for many years to come as they enter a market already teetering on overcapacity issues. Even BIMCO chimed in with their concerns. The reports indicate that the ships will slash the cost of shipping commodities, reduce freight rates, and delay the dry market recovery. Sounds like sour grapes, but we understand that the owners of larger Capesize tonnage should be concerned how the distribution of iron ore and coal will adjust with these new ship sizes and their economies of scale. Not to mention the fact that Vale’s direct relationship with the Chinese steel makers looks to guarantee a successful logistical change.

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