News By Tag
News By Place
Newport Shipping forecasts revival in the dry bulk segment
According to the latest edition of Newport Shipping’s Dry Bulk Market Outlook, seaborne trade in bulk commodities is expected to pick up after almost two years of slow to moderate economic growth to almost 9% this year, after which it will ease off slightly to an annual growth rate of about 7%.
Harald Lone, Newport Shipping’s Chairman and CEO, said: “The dry bulk markets, especially the Panamax, Supramax and Handy-size segments, have not been at the current low levels since the financial crisis in 2009. Strong supply growth, up 10.5% year-on-year for Panamax, combined with a decline in most of the major coal trades have pushed spot earnings for Panamax bulkers to about US$3,000 per day, well below operating costs.
“Due to correlation and the substitution effect, falling spot rates for Panamax and declining soybean, cement, nickel ore and bauxite trades have driven down spot earrings for both Supramax and Handy-size vessels.”
However, the turning economic tide, together with a significant shift in the pace of fleet expansion, as scrapping eats into new deliveries, is driving a market rebound, says Lone.
“Despite a slow start to the year, total dry bulk demand should rise faster in 2014 than in the past two years.”
In the latest edition of the market outlook report, Lone also comments on the psychology of bearish sentiment as an important factor influencing freight rates and fluctuations.
He states that “crowd mentality” can trigger large scale volatility.
Newport Shipping’s Dry Bulk Market Outlook 2014 Q2 can be downloaded at: http://www.newportshipping.com/