Cargo movement shifts from one segment to another rather easily (except in some cases when cargo size and draft restrictions at ports play a role) in the dry bulk market compared to other sectors. So, an oversupply in one segment trickles down to other segments rather easily. Therefore, an oversupplied Capesize market will, in turn, impact Panamaxes in the long run, which will further go down to smaller segments.
The current nemesis of the overall dry bulk market finds its genesis into the huge oversupply built up in the excessive new orderings in the post 2007-08 period which were delivered during 2010-12. As a result, 2012 saw the worst dry bulk in its history where the BDI went down to its lowest level and it looked as if the only way forward is an upward journey. The market did move upward for two years. The market did look like it was coming back to good days of net profits, recovering towards the end of 2014 but the improvement was more because of a short-term supply crunch in 2014 when many dry bulk owners filed for bankruptcy and some of the vessels were not available because of legal tangles…
