With 12 weeks of 2016 behind us, the dry bulk market is still looking bleak. As the current low demand for transportation of commodities continues, the market is doing what it can by scrapping old ships and restraining from ordering new ones.
With only four newbuilding orders registered in the first 12 weeks of 2016, dry bulk contracting is merely a fraction of previous year’s activity. New contracts for dry bulk ships have been on a path of decline in the last year and a half. Currently culminating at a level that resembles a standstill. The four orders amounting to 267 000 DWT is less than a tenth of the 2.8 million DWT placed by the end of February last year.
The ordering remains low despite 12-year low newbuilding prices offered from the shipyards. The fact that shipowners have restrained from renewing or adding to their current fleet is good for the immensely challenged dry bulk market. As an increase in new orders would only worsen the oversupply of capacity in the market, further down the road.
Chief Shipping Analyst, Peter Sand, says: “The low level of new orders is a much-needed development in the market.
With little to no influence over demand side developments, reducing supply is the only tool owners and operators on the dry bulk market can use to improve on the market situation.
The best way to do that is to limit the number of new orders and increase scrapping.”
Adapted from press release by Joseph Green
Read the article online at: https://www.worldcement.com/europe-cis/23032016/dry-bulk-market-looking-bleak-759/