During his presentation at the SteelOrbis 2020 Spring Conference & 82nd IREPAS Meeting held in Belgrade on March 1-3, Enrico Paglia, the research manager at Banchero Costa, said that freight rates are currently bottoming out, while deliveries are slowing down because order books are fairly limited.
According to Mr. Paglia, for iron ore, one of the major commodities, demand was heavily disrupted in the first half of last year due to the Brumadinho dam disaster in Brazil. He added that, although the fundamentals look positive, it is not clear how the coronavirus will affect the markets.
Regarding the IMO 2020 regulation which limits sulphur emissions, the Banchero Costa official said that the ships should switch to fuels with less sulphur content, which are a lot more expensive than fuels with high sulphur content. Alternatively, ship owners could invest in scrubbers which are used as a filtering system with a high installation cost.