While BDI posted annual average of 920 points in 2012 and hit the lowest record, bulker market in 2013 is expected to get better gradually, but unable to get out of overall depression.
As of early December, 2012, global bulker fleet stood at 675.6m dwt (9,464 vessels), up by almost 10% year-on-year, according to Clarkson. Bulker newbuilding orderbook plunged by around 40% to 140m dwt (1,778) from 232m dwt a year ago.
As for orderbook by size, capesize over 100,000 dwt secured 50m dwt (247 vessels), panamax between 60,000-100,000 dwt stood at 53m dwt (680), handymax ranging between 40,000-60,000 dwt and handysize between 10,000-40,000 dwt sat on 23.5m dwt (440) and 13.5m dwt (411), respectively.
Backlog had been downsized over the last year, however, capesize's orderbook to active fleet ratio still reached 18%, with 80,000-100,000 dwt getting close to 47%. Orderbook to active fleet ratio of 60,000-80,000 dwt accounted for 29%, while those of handymax and handysize took 17% and 16% each.
Meanwhile, during the first 11 months of 2012, a total of 92.7m dwt newbuilding bulkers were delivered. On an annualized basis, bulker delivery is estimated to surpass previous record of 105m dwt. However, in 2013, only 73m dwt bulkers are to hit the water.
While the largest amount of bulkers had been delivered over the recent two years, the segment saw relatively low ordering, due to severe tonnage oversupply.
During January-November period, only 16.9m dwt (258 vessels, $6.7bn) bulkers were newly ordered, down by around 60% year-on-year.
Every size saw 30-75% year-on-year decrease in new order - 3.3m dwt (17 vessels, $800m) capesizes were contracted, 8.3m dwt (110, $2.9bn) were signed for panamax, 2.4m dwt (47, $1.1bn) and 2.9m dwt (84, $1.8bn) were ordered for handymax and handysize each.
Due to depressed newbuilding demand, prices dropped accordingly. In case of 180,000-dwt capesize, as of early December 2012, newbuilding price fell down by 5% on a year ago to $46m, while 76,000-dwt panamax decreased by 11% to $25.8m. Newbuilding prices of 57,000-dwt handymax and 35,000-dwt handysize declined by 10% and 7% to $24.3m and $21m, respectively.
About 33m dwt bulkers were sold for demolition in 2012 and set a record high, surpassing 2011's 23m dwt. Bulker scrapping would total around 24m dwt in 2013.
While active scrapping is to continue, newbuilding delivery would sharply decline from the second half of this year and improve bulker oversupply issue.
DNB prospected that bulker freight rate would mildly recover this year and bulker tonnage is estimated to grow by 8%, lower than double-digit increase seen for the last four consecutive years. Also, China's total bulk import is expected to rise and proportion of tonnage under operation would grow up to 87% in 2014 from 83% in 2012, it added.