Dn the world of merchant shipping, bulk transport is neither the most prestigious nor the most profitable of the trades. For the past ten years, since the shock of the 2010s, the huge carcasses capable of loading up to 180,000 tonnes of iron, copper or wheat have made circles in the water while waiting for the customer. A dark decade, which sent many actors to the bottom. And then suddenly, without warning, charter requests poured in from all over.
Since the bilge, reached in April 2020, prices have climbed 700%. In March, chartering a “capesize” cargo ship, too big to pass the Suez Canal, cost around $ 20,000 per day. A month later, it’s over $ 40,000. The world, still ravaged by the Covid-19 pandemic, is hungry for raw materials. Copper, iron, wood, aluminum, wheat, soybeans, petroleum, everything goes up suddenly.
This Monday, May 10, iron exceeded $ 200 per tonne for the first time in its history. So much so that specialists, who were initially skeptical, are now dreaming of the return of a “supercycle”. In this profession, accustomed to roller coasters, as supply and demand never meet at the same time, we have recorded four supercycles since the industrial revolution, that is to say an increase above the long-term average. for ten to seventy years.
Twin engine boom
The first, from 1880, was carried by the emergence of the United States on the world scene, the second by the rearmament of the 1930s, the third by the oil shock of the 1970s, and the last, at the very beginning. of the 2000s, by the incredible growth of China. From 2011, the number of mines opened for ten years saturated the market, while the financial crisis had passed there, and prices collapsed. Goldman Sachs analysts believe this time it’s the right one, the supercycle is back.
According to them, the crisis due to Covid convinced States to prioritize job creation and environmental transition over financial stability. The gigantic American recovery plan and the very substantial European plan will trigger a boom in demand for infrastructure. With two engines, renewable energies and the electric car. For equal production, wind and solar consume considerably more steel and concrete than thermal or nuclear power plants. In addition, the electrification of objects, from the car to the jackhammer, and especially the need for storage batteries that it implies will explode the demand for the materials from which they are made.
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