Could the dry bulk shipping market pick up in 2015?

Looking back over the year, dry bulk has had its ups and downs. But what’s in store for 2015? SnP Broker George Iliopoulos discusses in the Intermodal Weekly Market Report
Could the dry bulk shipping market pick up in 2015?

As 2014 is coming to an end, we look back to what has happened during the year and notice that SnP activity has been particularly soft during the last quarter, especially as far as dry units are concerned. This is more obvious if one looks at the number of potential buyers inspecting sale candidates. During the same period last year, for every dry bulker, handysize up to Cape that was up for sale there were numerous of interested buyers inspecting, while most of them would end up offering as well. This resulted in a dynamic upward drive in prices in the SnP market during that period.

A representative example of this drive is a ’99 built Japanese dry panamax that was inspected a year ago by thirteen prospective buyers and acquired ten offers before finally being sold for a price in the region of USD 14,5m. This marked the start of a period of elevated activity lasting for the first five months of 2014. However, the strong momentum of the market started to weaken just before the summer season kicked off and purchasing interest for dry vessels naturally declined as the freight market started to witness further challenges.

Looking back, this period is reminiscent of the end of 2012/start of 2013 when the lowest post 2010 sales for supramaxes and panamaxes were recorded. An example of this is that a seven-year old Panamax that was sold at circa $15 million when today an equivalent sale would go for approximately $17 million. Another reason for the increased pressure on the SnP market, apart from the bad performance of freight rates, is the overabundance of vessels for sale in the dry market. A large number of vessels have entered the second hand market in the last two months mostly from Japanese owners following the performance of the Japanese Yen. As a result, most prospective buyers have a number of alternatives and therefore apart from very exceptions offer at fairly low levels compared to what owners are looking for.

This is therefore another characteristic of the SnP market nowadays, which is also weighing down on activity volumes. In fact the growing gap between buyer and seller price ideas is exactly what is forcing many owners to withdraw their vessels from the market. It is worth noting that a number of such vessels were Japanese-owned which is uncharacteristic of Japanese owners, who are traditionally known to sell at the best obtainable prices once they are set on selling their assets.

The big question troubling potential buyers is whether this is a good time to invest in the dry market or if waiting a little longer will reward them with even lower levels. The belief that we may sooner rather than later be revisiting the price levels of 2012 is gaining more and more support lately. It remains extremely challenging to discern whether we have reached the market’s lowest point in order to invest and calling the floor of a market is always more of a guess rather, which makes any predictions an uncertain bet; it is safe, however, to say that prices during the past few months have certainly been attractive and the coming period has the potential to be extremely busy in terms of interest in the SnP market.

In any case, we should hope that the dry market picks up in 2015 to return to healthy levels in order for vessels to become attractive due to their freight rates and not their low prices, as that’s where the true value lies after all.


by Laura Stackhouse Editor

Laura Stackhouse is the Web Editor of, an official publication of the International Marine Purchasing Association (IMPA). To discuss news, features or contributing to please get in touch.

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