BIMCO says that the dry cargo markets are likely to stay depressed for at least the next two months.
Chief analyst, Peter Sand said in a recent market overview from the organisation that looking at dry bulk shipping since early December 2014, things are “extremely bad”. The fourth quarter of last year saw capesize rates diving below $5,000 per day in mid December. On February 18 the BDI hit an all-time low of 509.
"Demolition of dry bulk tonnage was relatively modest for a long time when considering the fundamental conditions of the freight market,” Sand explained.
"However, recent extremely poor freight markets have stirred it up. At the end of February, 68 ships with a combined capacity of 5 million dwt had been demolished since the turn of year, out of which half were of capesize capacity with an average age of 21 years."
From March until May, BIMCO expects capesize rates to stay between $3,000 and $9,000 per day. Similarly panamaxes and supramaxes are likely to remain around $5,000 to $9,000 per day.
Sand adds that Indian coal imports will offer support, but the dominance of Australian iron ore exporters over the Brazilian compeitors is expected to continue.
“Australian exporters won the battle in 2014, much to the regret of the freight market,” Sand said.
“BIMCO expects that they will not let go of the lead, at the expense of long-haul shipping demand from Brazil.
“All mining majors have expansion plans in place for 2015 and 2016, and yet another Aussie, the new Roy Hill iron ore mine, will join them towards the end of 2015. The site is set for 55 million tonnes a year once fully operational.”