‘Recovery in dry bulk freight market to take one year’

CHALLENEGS confronting the global dry bulk freight market may take another one year, the latest Platts survey of shipping market participants has said.

This inaugural Platts Dry Bulk Market Survey was conducted in July and involved more than 100 dry bulk market participants, with respondents including shipowners, ship-operators, charterers, shipbrokers and analysts.

Those polled represented all dry bulk segments across the Capesize, Panamax, Supramax and Handysize markets. According to PR Newswire, some 89 percent of respondents felt the dry bulk freight market will need a minimum of one year to recover, while 54% of the industry players questioned were not expecting any positive changes for at least three more years.

Despite some signs of life in dry freight rates over the past few weeks, the results of our survey indicated that most market players do not believe in a sustained upturn any time soon,” said Peter Norfolk, Platts editorial director for global shipping & freight, adding that “While demand-side developments, particularly in China, remain of key importance to this sector, the overriding concern remains the oversupply of vessels.”

According to the report, among participants occupying various roles, shipowners were more pessimistic than charterers. 73% of shipowners said the market would need 3-5 years to recover, 41% of charterers felt the turnaround would happen in less than two years. However, both camps were unanimous that freight rates will not be shooting up within the next 12 months.

Shipping professionals continue to see tonnage oversupply as the main reason for the current depressed state of the dry bulk freight market, with more than half of those polled citing this as the key issue hampering the sector.

Despite reasonable growth in demand across the key commodities, it remains outstripped by the availability of dry bulk vessels around the globe.

As for the differences across the vessel classes, some 41% of respondents believed that all of the dry bulk market segments are contributing to its overall failing health.

The benefits accruing from eco-efficient vessels on freight rates, the report explained seem to be marginal with 43% of respondents saying these ships have no significant impact at the moment.