The dry bulk shipping industry, which should be facing another year of improvement to the fundamental balance, is currently in its year of opportunity, according to BIMCO.
The improvement is expected amid the slowest pace in fleet growth since 1999, as well as solid growth in demand.
January saw plenty of ship deliveries coming onto the water as it reached a ten-month high at 4.8 million dwt, while 0.7 million dwt were demolished. Although the fleet growth slowed down, the flip side is that more new orders are being placed at Far Eastern shipyards by global shipowners and investors.
According to BIMCO, the dry bulk shipping market requires careful handling in the first quarter of the year as seasonal cargo demand drops. In terms of freight rates, the positive development that characterised most of the second half of 2017 came to a sudden end on December 12, 2017, once capesize earnings peaked at USD 30,475 per day.
By the end of January, the freight rates for all sizes of dry bulk carriers were at break-even levels – covering both OPEX and CAPEX – but not turning profitable.
Although CRSL data shows that the overall tonne miles demand grew by 5.1% in 2017, powered by a massive lift in Chinese imports once again, BIMCO believes that the strong demand will not be repeated in 2018.
“Our forecast for overall demand growth in 2018 is around 2-3%, with plenty of uncertainty surrounding that. Not just in terms of volume, but most likely also in terms of sailing distances,” BIMCO said, adding that seen against a fleet growth of 1.4%, an improved market is still expected.