Interest in bulker newbuildings rose exponentially last year and has been biased towards the smaller sizes, with around half of the 968 new orders for supramaxes and ultramaxes, Banchero Costa head of research Ralph Leszczynski told the Marine Money Hong Kong Ship Finance forum this week.
While this may seem worrying, it is a problem that will only emerge in 2016 and 2017 as the deliveries start to emerge. The consensus among dry bulk players at the conference was that the market fundamentals are better now with rates of $25,000 to $26,0000 being able to be achieved on longer term charters for capesizes. "This is a good number which we haven't seen for a long time," noted Noble Group chartering head Ravindranath Raghunath.
However, Raghunath pointed out that the real troubling issue is what happens when the deliveries start to kick in in 2016 and 2017. "For the next two years the actual deliveries are not very high but it could increase a lot in 2016 and 2017," he said.
Giving the Chinese perspective, Bimco's Shanghai Centre general manager Wei Zhuang pointed to the fact that China's seaborne import volumes have doubled to 2bn tonnes last year in just five years since 2008. "We are approaching a balance between supply and demand and a good market for dry bulk with recovery in sight," Wei said. He added that China will continue to be the key to the dry bulk market.