Bulkers in the range of 20,000-64,999 dwt may have a tough time this year due to a global drop in commodities demand and over-tonnage, but growing shipments of steel products and agribulk cargoes could provide longer-term support, said Banchero Costa.
The Baltic Supramax and Handysize timecharter indices averaged USD6,507/day and USD5,285/day respectively during the first five months of 2015.
This is a fall of 40% and 42% respectively compared with the same period in 2014.
Deliveries of up to 500 Handysize and Supramax bulkers of 20,000-64,999 dwt are expected in 2015, totalling approximately 25.8 million dwt.
For vessels between 60,000-64,999 dwt, the orderbook accounts for 151% of the current fleet in unit terms, a ratio that presents concern.
For vessels between 30,000-39,999 dwt, the orderbook accounts for 25% of the current fleet in unit terms.
Italian broker Banchero Costa noted that as China grapples with an oversupply of finished steel products, it has been exporting more of the same in recent years.
In 2014, China exported 93.8 million tonnes, mainly to India, Philippines, South Korea, and Vietnam. In the first four months of 2015, China exported 34 million tonnes of steel product, up 33% year on year.
Agribulk commodities such as wheat, coarse grain, and soyabeans provide significant cargoes for Handysizes.
As the world population grows, global wheat trade has surged 40% over the last 10 years. The US Department of Agriculture estimates wheat and coarse grain world imports during the 2014/15 to be around 297 million tonnes, with Asia being a key destination, accounting for 95 million tonnes.
China is also expected to import more soyabeans, with imports in 2015/16 expected to reach 78 million tonnes. The second-largest importer of soyabeans is the European Union, which is expected to import up to 13 million tonnes in 2015/16. Soyabean exports are dominated by Brazil and the United States.
Banchero Costa commented, “The substantial newbuilding deliveries that are expected this year, in combination with a relatively stable trade forecast, could add further short-term pressure on an already frail Handysize and Supramax market. Longer-term prospects should be better.”
This post was sourced from IHS Maritime 360: View the original article here.
