Dry Bulk Shipping Will Not Return To Profitability Before 2017: Drewry

by Ship & Bunker News Team
Thursday December 3, 2015

Drewry Wednesday said in a new report that the consultancy doesn't expect a recovery in the dry bulk shipping market until at least 2017.

"A recovery to the point that shipowners start earning profits will remain elusive for at least another year," said Rahul Sharan, Drewry's lead analyst for dry bulk.

The firm's Dry Bulk Forecaster report noted that a "more stable supply-demand balance hinges largely on the expected improvement in the demand outlook".

A recovery in dry bulk demand will be led by iron ore trade, which is forecast to grow at a moderate pace of 3-4 percent over the next few years, said Drewry.

Coal imports to China are unlikely to aid in the recovery, however, as such shipments have slowed down and a rebound is not expected any time soon.

Drewry did note that coal imports to India are continuing to rise steeply though.

Overall, the supply side of the dry bulk market is expected to see "moderate growth", Sharan said. 

The report also noted that oversupply is being reduced as ship owners continue to downsize their vessel holdings, which should enable oversupply to reduce over the next five years.

The global dry bulk fleet grew just 2 percent in the first nine months of 2015, reaching 773 million dwt.

In September 2015, Ship & Bunker reported that Drewry's research shows tumbling bunker prices have halved the slot cost benefit for mega-ships.