Dry Bulk Survey: Majority of Industry Players Say Recovery is at Least 3 Years Away

A new Platts survey report says it will take at least another year before the dry bulk shipping market starts to recover.

A recent market survey conducted by Platts suggests dry bulk players believe that it will take at least another year before the sector begins to recover, with over half speculating a recovery is at least three years away.

The survey, which was conducted in July and is said to have included more than 100 dry bulk market participants, showed that 89 percent of respondents felt the global dry bulk freight market would need at least one year to recover, while 54 percent are not expecting to see any improvements for three or more years.

Shipowners were identified as having the most pessimistic outlook, with 73 percent saying the market would need three to five years to recover, compared to 41 percent of charterers feeling a turnaround would happen in less than two 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, editorial director for global shipping & freight at Platts.

"While demand-side developments, particularly in China, remain of key importance to this sector, the overriding concern remains the oversupply of vessels."

The survey is said to show that market participants felt that the oversupply of capacity as the main reason for the "bearish" dry bulk market, and despite demand growth, 39 percent of respondents pin their hopes for market recovery on vessel scrapping.

In terms of differences between vessel classes, Platts notes that 41 percent of survey participants felt that "all of the dry bulk market segments are contributing to its overall failing health."

"Though if there was a spider in the web, it would probably be identified as the Capesize market," said Platts, adding that 33 percent of respondents believed this to be the case.

Last week, Jan Kastrup-Nielsen, president and CEO of J. Lauritzen was reported saying, "the dry cargo markets encountered during the first half of 2015 turned out to be weakest for the last 30 years."