BIMCO: Dry Bulk Industry’s Road to Profitability

Image Courtesy: Diana Shipping

The dry bulk shipping industry remains well on target for profitable freight rates in 2019 if the projected fleet supply growth rate of 0% in 2017 continues, according to international shipping association BIMCO.

In 2016, the supply side grew by 3% and the demand side grew by 2.4%, which resulted in a worsening of the fundamental market balance.

The handymax segment may even see profits in 2018 as demand may go beyond 2% in 2017, before reverting to 2% in 2018 onwards.

However, as the original “Road to Recovery” in May 2016 projected an even worse fundamental deterioration in 2016 – we are today, in a relatively better position than anticipated nine months ago.

“Estimating a return to profitability in the dry bulk industry remains a moving target, and one that differs from one company to the next. But by projecting a course for profitability, everyone in the industry can use it as a reference,” Peter Sand, BIMCO’s Chief Shipping Analyst, said.

“The fact that the first half of February 2017 was a troublesome period came as no surprise and it makes the strong comeback in the following month stand out as even more remarkable. During that time, the BDI went from 688 to 1,147,” Sand added.

BIMCO said that this lift in freight rates is positive, but added that there is still work to be done on the supply side, coupled with a significant level of demolition activity.

“In total, freight rates will be slightly higher than originally projected for the coming years. Combining the relatively better freight market, with a 10-year-low OPEX level in 2016 – the dry bulk industry remains on the road to recovery,” BIMCO informed.

Share this article

Follow World Maritime News

In Depth>

Events>

<< Apr 2017 >>
MTWTFSS
27 28 29 30 31 1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30

THE 30TH WORLD PORTS CONFERENCE Enabling Trade Energizing The World

This event is expected to have more than 500 attendees from the field of port, logistics, shipping and maritime industry…

read more >

Singapore Maritime Week 2017

Singapore Maritime Week (SMW) is the leading maritime event in Singapore. Driven by the Maritime and Port Authority of Singapore (MPA), SMW…

read more >

Breakbulk Europe 2017

For more than a decade, Breakbulk Europe has served as the networking hub for industry professionals who do business in Europe — or would like to! Exhibitors and sponsors include cargo owners, ocean carriers, freight forwarders, ports/terminals, heavy haulers, equipment companies and more that are involved in this specialized industry.

In addition to exceptional networking opportunities, Breakbulk Europe provides a dynamic conference, along with a range of educational and training workshops — intensive all-day classes held the day before the exhibition opens as well as many on-the-floor sessions.

  • Over 7,600 participants attended Breakbulk Europe 2016
  • Meet with over 400 exhibitors and sponsors
  • Hear from industry experts, including leading shippers, during the conference sessions
  • Learn new skills in the educational workshops held before the exhibition and on-the-floor micro-seminars and exhibitor-led sessions during the event

More info

read more >

Smart Operations

Smart Operations events, from Fathom Maritime Intelligence, examines how to use intelligent shared integration, and connected operations…

read more >