The dry bulk market on South America’s West Coast is facing growing pressure on vessel availability and logistics infrastructure, driven by expanding mining activity, shifting trade flows and the demands associated with the energy transition.

Speaking at the “International Dry Bulk Shipping Seminar: Challenges, Solutions and Best Practices” held in Santiago, José Tomás Lagos, Market Analysis Manager at Lighthouse Chartering, said that freight rates have reached their highest levels since the post-pandemic recovery.

“We are experiencing a very special year, with the highest post-pandemic freight rates,” he stated.

According to Lagos, strong iron ore demand from China and India has boosted Capesize freight rates, a trend that has gradually spread to smaller segments of the dry bulk market. As a result, freight costs for copper concentrate shipments from Chile to the Far East have risen significantly.

He noted that the average freight rate for transporting a 10,000-metric-ton shipment of copper concentrate is currently around US$63 per ton, compared with levels below US$52 in previous years, representing an increase of nearly 20%.

In his view, current market conditions are likely to persist throughout the remainder of the year.

“For this year, these elevated levels are expected to remain sustained,” he said.

Pressure on the market is not coming solely from demand. According to data presented by Lighthouse Chartering, Chile and Peru generate an imbalance of approximately 21 million tons in the regional dry bulk market, while Colombia and Ecuador partially offset that deficit with a combined balance of 6 million tons in favor of imports.

This situation is compounded by the gradual decline in coal imports into Chile as a result of decarbonization goals. While the country imported nearly 10 million tons of coal in 2020, volumes currently stand at around 5 million tons and could fall to just 2 million tons in the coming years.

At the same time, Lagos warned that “new mining projects, growing exports from Ecuador and the sharp reduction in imports will continue to deepen the imbalance on South America’s West Coast.”

The executive also highlighted the impact of environmental regulations on shipping supply. Since 2020, average vessel speeds have declined by approximately 9% due to energy-efficiency and emissions-reduction measures, reducing the effective capacity of the global fleet.

Ecuador Emerges as a New Growth Hub

Within this regional context, Ecuador is emerging as one of the markets with the greatest growth potential for the dry bulk industry.

Pablo Rizzo, CEO of MUCIERT S.A., explained that the expansion of the shrimp farming industry is driving a significant increase in grain and fertilizer imports.

“Grains, both wheat and soybeans, are growing at double-digit rates,” he said, adding that this represents approximately 400,000 additional tons per year.

Currently, Ecuador handles approximately 28 million tons of cargo annually, of which between 8 and 9 million tons correspond to dry bulk and general cargo. However, projections point to substantial growth over the next decade.

“If today we are handling around 8 million tons, in ten years we could reach 17 million tons,” Rizzo stated, citing expected growth in grain, fertilizer and steel imports, as well as new mining projects linked to copper concentrate exports.

Nevertheless, he warned that the main challenge will be developing sufficient infrastructure to accommodate such growth.

“We do not have the berths, the dredging capacity, the trucks or the warehouses. We have nothing to handle that volume,” he said.

Among the identified requirements are more than 150 hectares of storage facilities, approximately 1,000 additional trucks, expanded port capacity and further investments in existing terminals.

The concern is significant. According to Rizzo, some Ecuadorian ports already experience waiting times of between 20 and 30 days during peak periods.

“Economies are growing faster than ports,” he warned.

Currently, most vessels discharging bulk cargo in Ecuador continue on to Peru or Chile to load mineral concentrates. The country’s objective is to generate sufficient export volumes to balance these flows and reduce vessel repositioning requirements.

“The consequence of doing nothing is ending up like Buenaventura today, with vessels waiting 60 days to berth,” Rizzo cautioned.

Despite these challenges, participants agreed that the continued expansion of regional mining activity—particularly copper mining—will keep driving demand for maritime transport and further establish South America’s West Coast as one of the world’s leading growth hubs for the dry bulk shipping market.