The dry bulk market is forecast to enjoy modest growth of 0.5% year-on-year for 2016, according to Luciana Salles, principal analyst at IHS Maritime & Trade.

She highlighted that the growth will be driven by an increase in iron ore and steel exports. Rising demand of these commodities will lead the bulk trade to grow at an estimated average rate of 2.5% in the five-year period from 2015-2020.

Her sentiment is shared by Rajiv Biswas, senior director of IHS Global Insight, who expects that rising steel exports from China are due to weak domestic demand of the commodity. For example, China's steel exports rose by 65% in 2014 to 85 million tonnes before increasing by 17% to 102 million tonnes in 2015.

Going forward, Biswas believes that China will continue to export more steel products in 2016 as its domestic consumption for the commodity is forecast to drop by 3% year-on-year to 781 million tonnes this year. It is expected to drop to 678 million tonne by 2020.

Meanwhile, seaborne coal imports/exports, one of the key commodities in driving the bulk market, slipped by 7% year-on-year in 2015, while iron ore saw an increase of 2.5% year-on-year in 2015. However, the biggest gain belonged to grains, with a recorded growth of 4% year-on-year in 2015.

"Dry bulk growth was flat in 2015, the lowest annual growth in 30 years, excluding 2009 crisis," said Salles.

In terms of the dry bulk fleet, Salles estimated that a total of 83 million dwt of dry bulk newbuildings are scheduled for delivery in 2016, but the vessel lay-up, slippages, and demolitions would soften fleet growth.

According to Salles, Capesize and Supramax bulk carriers are expected in 2016 to see about a 2% to 3% growth in newbuildings, at 312 million dwt and 178 million dwt, respectively, while growth from Panamax and Handysize newbuildings remains relatively unchanged.

"2017 will be a transition year for the dry bulk market, after recording flat growth in 2015 and an estimated modest growth of 0.5% in 2016," she said.

Salles expects that in 2017 the supply and demand gap will start to narrow, with an expected rise in demand of 2.4% year-on-year against the bulk supply increase of 1.3%. So while the bear market will continue throughout 2017, she predicts that the market may head toward improvement in 2018.