The Baltic Dry Index, reversing gains made last week, shed 23 points Tuesday, falling to 926.
New York-based shipping analysts, as well as industry executives, suggest that dry bulk rates are bound to see moderate improvement this year, which may lead to more substantial gains in 2018, IHS Fairplay reports.
As Ship & Bunker reported last week, while a number of dry bulk players have expressed optimism that the dry bulk market is now on the road to recovery from record lows, shipowners also caution that 2017's outlook is unpredictable, requiring the shipping industry show commitment to tonnage demolition and refraining from placing newbuild orders.
"Better is a relative term," said Jon Chappell, an analyst at Evercore ISI, in a note to clients on Monday.
"We do not believe the dry bulk markets will revisit the depths of the first quarter of 2016 trough, but we do expect the first half of 2017 to be weak relative to all prior historical periods given the ongoing overcapacity plaguing the market. The market may inch back towards balance in the back half of 2017 and into 2018."
Jon Chappell, Analyst, Evercore ISI
Better is a relative term
The Baltic Dry Index (BDI), reversing gains made last week, shed 23 points Tuesday, falling to 926.
In terms of average spot TC rates, Capesize segment earnings shrunk to $10,787 per day (-$1,009) on Monday, Panamax earnings rose to $7,771 per day (+$371), while Supramax earnings declined to $8,006 per day (-$64).
Last Friday, Ship & Bunker reported that Eddie Huang, managing director of Glory - Pacific Shipping (S) Pte. Ltd. (Glory Pacific Shipping) says increasing bunker prices in 2017 will put more pressure on already challenged dry bulk vessel operators.