The slowdown in fleet supply growth for dry bulk ships should result in better diversification in ship sizes over the next few years, according to HIS Maritime & Trade’s latest Fleet Capacity Forecast.
The forecast shows that around 47 million deadweight tonnage (DWT) of dry tonnage ships was delivered in 2014, which increased the total fleet capacity to 730 million dwt. The capacity addition in 2014 was, however, 22% lower than in 2013 and nearly 53% lower than in 2012.
Richard Clayton, Chief Maritime Analyst at IHS Maritime & Trade, said: “After a promising 2013, it looked as if the upturn in the dry bulk market would begin early in 2014. However, a slowing Chinese economy led to a fall in the volume of cargo imported.
“This, combined with the steady flow of newbuilding ship deliveries throughout the year, has put freight rates under severe pressure. The Baltic Dry Index, which charts the fortunes of the dry market, hit a historic low level in February 2015. I think this year could be challenging for ship owners.
“The upside of a low dry market is that owners are less likely to order ships. If this continues into the medium term, the prospect for recovery is good. On the other hand, investors might use the opportunity of low ship prices to place orders in the expectation of an upturn. There are several variables at play. As always, the key to recovery is maintaining discipline.”
IHS Maritime & Trade expects deliveries will show a slight acceleration in 2015 as they were around 40% higher (totaling 76 million DWT) than in 2014. If all deliveries come to fruition, this would mean a 10.5% total (dry bulk) fleet growth for 2015.
Clayton concluded: “Putting pride aside, consolidation and collaboration are tried and tested ways to weather the challenging times. Shipping alliances such as Capesize Chartering help owners to take control over supply and demand in the short term by positioning their vessels to increase freight rates until the market picks up.