The owners of dry bulk carriers have been resisting the temptation to place contracts for new ships despite the currently low building prices for dry bulk ships with orders now at the lowest level since 2003, according to BIMCO.
Its chief shipping analyst Peter Sand said: “For there to be an actual shorter-term improvement in the market we would need to see a spike in demand or a substantial reduction of the fleet.” All total, the dry bulk contracting fell substantially last year compared to 2014.
By early December, the total volume of new contracts placed at yards in one of the three big shipbuilding countries, China, South Korea and Japan, was just 11.3mn dwt. This compares to 58mn dwt of dry bulk capacity contracted in 2014 in the same three countries.
In December, Mr Sand said: “Although orders remained remarkably low through the year, one order by the Nippon Steel & Sumitomo Metal Corp (NSSMC) stood out in September. The NSSMC wishes to replace its Capesize fleet with larger ships and has ordered nine VLOCs from two yards in Japan.”
He said that China had been the largest producer of dry bulk ships in recent years, but has also experienced the most significant drop this year. Chinese yards have only signed contracts for 2.5mn dwt of new dry bulk ships last year. In 2014, the full-year total was 34mn dwt.
“The dry bulk market has been in a slump in 2015 mainly due to a great imbalance between supply and demand. The demand for dry bulk commodities has slowed down during the year with coal taking the biggest hit,” said Mr Sand.