The outlook for the dry bulk market is seeing greater periods of oversupply and slowing global demand after the industry’s Dry Bulk Index fell to another record low of 303 points, which is 2.2% lower than the previous low.
The overall index is used to measure the cost of shipping dry bulk, including iron ore, cement and grain.
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The slump in the index has arguably been caused by the slowdown in the Chinese economy which is causing a lack of demand in the bulk markets, which in turn is having further effects on global demand in general.
PTI previously reported that the dry bulk industry in a state of turmoil and will need to take drastic measures to rectify the supply side if it is to return to profitability.
Industry experts Moore Stephens previously said that the shipping industry is expected to remain volatile in 2016 and a possible solution is for the dry bulk sector to reduce its orderbook while focusing its efforts on more ship recycling in 2016.
Drewry recently estimated that if dry bulk ship-owners collectively removed half of all capesize ships over 12 years old, equating to around 20 million dead weight tonnage of capacity, it would enable their earnings to return to profitability by 2018.
If they were to remove all old capesize vessels the recovery would occur even sooner. This could be achieved through a combination of scrapping and temporary vessel idling.