b'MAY 10 - 23, 2021BREAKBULK QUARTERLY 13Super cycle: Dry bulk shippingBULK SHIP COMPARISONmaking historic run With May here, surprisingly the Baltic Dry BulkIn Dead Weight Tons (DWT)Index (BDI) breached 3,000 points. Its the highestHANDY10,000 - 49,999the BDI has reached in over a decade. Its no sur-prise that the underpinnings of the BDI surge are the demand in China. Still, the surge has manySUPRAMAX50,000 - 59,999contributing,andpotentiallyvolatile,compo-nents. And the question is how long will the upside of the super cycle last? PANAMAX 60,000 - 99,999George Lauriat, AJOTg oingu p .surge, the BDI has struggledCAPE SIZE 100,000 - 199,999InMay,theBalticDrytopostmuchabove2400 BulkIndex(BDI)compiledpointsuntil now. bytheLondon-basedBalticSo, whats different? VLOC200,000 - 299,999Exchange, eclipsed the 3,000 point mark barriera thresh- s upeRc ycle : c hineseold that has seemed well outD emAnDof reach for over a decade.In a nutshell, China is theULOC 300,000 - 399,999Optimism,likebuddingbig difference.springflowers,nowper- BIMCOsPeterSand vades an industry that untilcommentingonthesurge recently exuded a dour prag- wrote, The impact of ChinasCHINAMAX / VALEMAX400,000 +matism borne from the hard(CYCLEcontinued on lessons learned on the slidespage 17)of the wrong side of the busi-ness cycle.Dry bulk freight rates are driven by the global demand forcommoditieslikeiron, coalandbulkagricultural products like grains. Added to these bulk commodity main-staysareminorbulkslike salt,bauxiteorevenbreak-bulkitemssuchasforestry productsandwindpower parts. It feels like every com-modity is in high demand as the global economy begins to emerge from the chill of the pandemics touch. Jan Dieleman, president ofCargillsoceantrans-portationdivision,saidin aReutersinterview,We are seeing demand continu-ingtobestrong,especially onthemaincommodities. This might be an understate-ment.Someeconomistsare alreadylabelingthisrunas theupsideofaneconomic supercycleliketheone experienced in 2006/7.In most years, the avail-abilityofdrybulkshipsis sufficienttokeeprateslow. Adding ships to the existing fleetthroughnewbuilding programstendstocapany long term runs.After all, with the excep-tion of two notable runs, July of 2003 and June of 2005 and a spectacular run in May of 2006 to crash in the autumn of2008with[theonsetof theGreatRecession],the BDI has rarely sniffed 3,000 points. That Great Recession plunge in 2008 is legendary, goingfromanall-time high of 11,793 points in May 2008 to a low of 663 in December of the same year.Yes, there were a number of good months in 2009 and 2010duringtherecovery periodwhentheBDIman-agedtogetoverthe3,000 mark but by June 2010 those recoveryspikeshadended. Andlikethedecadesprior to the remarkable 2006-2008'