Drewry: Fuel-Efficient Ships Will Help Dry Bulk Market to Recover in Late 2015

by Ship & Bunker News Team
Wednesday February 18, 2015

Drewry Shipping Consultants Ltd. (Drewry) Tuesday announced that it expects the dry bulk market to experience a recovery later this year, partly as a result of new, fuel-efficient ships.

"We expect rates to remain under pressure through the first quarter of 2015," said Rahul Sharan, Drewry's dry bulk shipping lead analyst.

"However, thereafter earnings will recover as modern fuel efficient ships gain employment at higher rates relative to older ships.

"This is one of the reasons why average charter rates recovered in 2014 compared to 2013, despite continuing capacity pressure."

Modern vessels are said to command higher rates due to their fuel efficiency and environmental credentials, and the average age of the global dry bulk fleet has reportedly reduced from 12 years to nine since 2011.

In addition dry bulk trade has picked up, increasing 8.3 percent in 2013, particularly as a result of higher iron ore and grain shipments.

And moderation is also expected in terms of fleet growth, partly reining in overcapacity problems.

Some dry bulkers currently on order at shipyards are expected to be converted to tankers and continued slippage in delivery dates is forecast.

"We anticipate that 2015 will be another year in which dry bulk demand outpaces supply," said Sharan.

Earlier this month, Danish dry bulk carrier Copenship filed for bankruptcy, citing an "extremely bad" market.

Ship & Bunker News Team
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