As the year kicks off, we lay out some of the key themes to watch that could shape the dry bulk markets over the next twelve months.

Chinese policy decisions

In 2022 the Chinese government faces multiple tests, including, but not limited to, the fallout from defaulting property developers, energy shortages and a battle to completely eradicate COVID-19 within its borders that is looking increasingly infeasible as new variants spread across the world. The policies implemented to combat these issues will continue to shape the country’s raw material demand this year.

Beijing is carefully trying to deleverage China’s real estate sector, but the resulting property slowdown has created holes in the finances of local governments and has dented consumers’ personal wealth and spending activity. The country’s central bank eased policy slightly last year but the measures have been very tame so far.

On the pandemic front, so far only a handful of cities appear to have locked down due to fresh coronavirus outbreaks, but more strict measures could disrupt demand further, especially as the Chinese New Year period approaches. At the beginning of the pandemic, people not being able to return from their hometowns due to travel restrictions was a leading cause of the sharp drop in output.

Tight rules at ports also drove congestion of ships in China higher last year, and over the last few weeks the measures have only become stricter and more disruptive. It seems unlikely that these issues will go away quickly, so we expect them to continue to keep the market tight over the next few months.

And lastly, two major events are scheduled for 2022. The first is the Winter Olympics in February. In the lead-up to this we’ll likely see further cuts to industrial activity to curb pollution (exacerbated by energy shortages), though restocking of bulk commodities is likely to continue. The second is the 20th National Party Congress in October, which will decide whether Xi Jinping will remain leader of the Chinese Communist Party for a third term. This underscores how critical it is for the government to balance quickly combating all the issues with supporting economic growth.

Energy markets

Tying into the above, an extremely volatile global energy market will continue to shape bulk carrier demand, through its influence over coal trade flows.

This comes against a backdrop of stricter decarbonization pledges from mostly developed economies, which have left some countries vulnerable to temporary but sudden falls in renewable energy output or natural gas supplies. Such blind spots have been a key ingredient in the ongoing energy shortage in Europe, which has already translated to a modest rebound in the continent’s coal demand. At the same time, shortages in China last year drove an increase in coal imports from traditional sources (apart from Australia which remains off-limits) but also from more distant suppliers that helped to boost shipping demand, a trend which is likely to continue this year.

More recently, in an ongoing story, Indonesia has announced a ban on thermal coal exports. It is still unclear how this will develop, with some miners reportedly now allowed to ship their product, but if supply is constrained for a prolonged period, it will likely open the door to more of these atypical trade patterns.


As usual the weather will likely play a key role for shipping markets. Bad weather in China has the potential to make queues worse again and tighten the Pacific market, but cyclones in Australia over the next few weeks would have the opposite effect.

Further, rain in northern Brazil has already influenced the volume of Capesize cargoes available in the Atlantic, but dryness in the south, caused by a La Niña weather pattern, has hit the conditions of soybean crops in the region. This will be a key driver of grain exports from the region, but shortages could also trigger more volumes being shipped from the US on different trade routes and vessel types.


As the year progresses the efficiency regulations coming into force from 2023 will loom ever larger, and owners will need to prepare for compliance and for effects on the market that these rules may have. Although key pieces of the EEXI and CII regulations are yet to be clarified, we believe that the leadup to their implementation will have a material impact on the effective carrying capacity of the fleet in addition to the decisions owners make on fleet renewal.