A New Dawn for Dry Bulk



Rahul Sharan, Drewry


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.

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…

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