BIMCO: Dry Bulk Industry’s Road to Profitability

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>

<< Nov 2019 >>
MTWTFSS
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 1

Maritime Reconnaissance and Surveillance Technology

As varied threats in the Mediterranean Sea continue to proliferate, the need to advance…

read more >

CrewConnect Global 2019

CrewConnect Global is the leading forum for collaboration to advance new industry approaches to seafarer recruitment and training.

read more >

CruiseConnect Global 2019

Attend CrewConnect Global and stay on for the CruiseConnect Summit to take part in an industry-wide conversation focused…

read more >

CWC World LNG Summit & Awards Evening

The CWC World LNG Summit & Awards Evening will be returning to Rome in 2019 to celebrate it’s 20th year.

read more >