It seems that the worst is finally over for the bulker owners as the Baltic Dry Index (BDI) is expected to recover in April with stagnant supply and rising demand for vessels.
According to UK-based shipping consultancy Drewry, supply is expected to slow down with a decline in newbuilding activity and a rise in demolition, in addition to conversions of dry bulk vessels into tankers.
Drewry expects the demand for grain, thermal coal and petcoke to improve. The signs of market improvement are already on the horizon with improved freight rates in March.
Earnings for all segments went up, except Capesize, whose earnings declined as China restricted its iron ore imports to comply with environmental regulations and to protect local producers.
Capesize shipowners and charterers have been unable to recover their operating costs, as they opted to idle their vessels rather than trading at a loss. Coal and grain trade also improved, Drewry’s data shows, with a rise in demand for thermal coal from India and improved employment opportunities for Panamaxes and smaller vessels in Japan.
However, according to Drewry, the outlook for iron ore trade remains grim for the next month with no signs of any major overhaul in the trade pattern.