The ongoing recovery within the dry bulk shipping industry is still in a fragile state despite improving market fundamentals in 2017. Nevertheless, BIMCO expects the fundamental market balance for the dry bulk sector to improve further in 2018, if operational speeds do not increase. In BIMCO’s most recent Road to Recovery market analysis, it is highlighted that 2018 could become the first full profitable year since 2011 for the dry bulk shipping industry. However, we shouldn’t be too hasty, as this is mostly in the hands of the shipowners and their handling of the supply-side in terms of demolition and slow steaming.
The dry bulk fleet is currently set to grow by 1.4й in 2018, the slowest pace since 1999. In combination with BIMCO’s expectations for demand growth in 2018 to outstrip supply growth, the dry bulk shipping industry is heading for another year of improving market conditions.
The demand growth in 2017 was highly influenced by growing Chinese imports as coal and iron ore into China provided strong support to the global demand growth. If 2018 delivers similar demand growth (+ 5% ), the dry bulk shipping industry will experience a full year of profits. BIMCO forecast demand growth in 2018 of 2-3й. We should be aware that 2018 may not be quite as strong as 2017, and profits may not come around until 2019, if the ongoing recovery is not handled with care.
