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A New Dawn for Dry Bulk

A gradually narrowing supply-demand gap augurs well for the dry bulk market. Good news at long last. Oversupply as a percentage of total demand is expected to come down from 28.5% in 2016 to 26.5% in 2017, which may well push the annual average 1-year time-charter rates for a typical 5-year old Capesize vessel to more than US$15,000 per day (pd) from a low of $8,100pd as recorded in 2016. 

By 2021 oversupply might come down below 20% and then charter rates could move beyond $25,000pd. The basis of contracting oversupply originates from a robust demand growth from the developing world, as well as from a receding orderbook to fleet ratio. A comprehensive and elaborate description is given in Drewry’s Dry Bulk Forecaster.

ORDER-BOOK SHRINKAGE
For the first time since 2000 the order-book has shrunk below 8% of the total dry bulk fleet. A slim order-book will make room for slower growth in the dry bulk fleet over the next couple of years. Even if new orders increase, yards will take about two years…

Rahul Sharan, Drewry
Edition: AI & Automation

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