Bulker market could buckle down to improve from the latter half of 2013.
Recently RS Platou Markets said that dry cargo fundamentals could improve from the second half of this year, possibly to result in higher earnings. Analyst Bjorn Bodding of Platou explained the slowing trend in fleet growth would be seen during the course of the year and while demand prospects are uncertain, recent economic trend in the US and China is encouraging.
Currently capesize spot rates remain $7,260 per day, while capesize rates are tipped to average $11,000 daily in 2013, $19,000 daily and $30,000 daily in 2014 and 2015 each, according to Platou.
Pareto Securities predicted dry bulk market would stay in trouble until the first half of this year, however, bulker demand growth is to outpace fleet supply, which could cause dry bulk charter rates slowly start to rise towards the end of the year, amid iron ore import need in China being highly likely to ramp up during H2.
Pareto forecasted bulker demand in dwt terms to rise by 7.7% in 2013, outpacing a predicted 6.7% increase in supply, saying "Utilization and market fundamentals will keep improving in 2014 and 2015." It prospected that bulker fleet utilization fell to 86.2% in 2012 from 95.6% in 2009, but will rise to 87% this year to reach 92% in 2015.
Pareto noted "there is limited downside risk for newbuilding prices as they have decreased to historical lows adjusting for inflation," and argued that now is the time to invest in fuel-efficient newbuildings.
It added that secondhand values, especially resales could fall further, considering a difficult financing environment and new eco-designed bulkers.
Pareto expected earnings for 170,000dwt capesize bulkers will record about $12,000 daily in 2013, which will grow up to $28,000 per day in 2015.
During recently held 'Marine Money London Ship Finance' form, most of brokers and market experts forecasted that bulker market would improve, while tanker segment continue to be stagnant this year.
James Leake, managing director of ICAP Shipping Research, said if bulker fleet growth slows down and iron ore and coal supplies boosts fleet demand in 2013, we could see the market recover as we enter into 2014.
Chief executive Angeliki Frangou of Navios Maritime Partners in Greece had also revealed his optimism about a recovery in the dry bulk market, with favorable developments at the start of 2013 included strong economic action by European Central Bank, the US, Japan and China.
According to Clarkson, as of the end of 2012, global bulker fleet stood at 9,490 vessels of a combined 679.17m dwt, up by 10% year-on-year in dwt terms and reached 9,000 vessels for the first time ever.
With massive newbuildings joined the fleet in 2012, newbuilding delivery overwhelmed bulker demolition. Bulker chartering activity recorded low last year, due to worsening imbalance between fleet demand and supply.
In 2013, 181 capesize bulkers, 487 panamaxes, 327 handymaxes and 277 handysies are scheduled to hit the water, however, much less newbuildings are to be delivered by ordering cancellation, delivery postponement, etc.