The long-lasing poor condition in dry bulk shipping market has driven many owner and shipyards to go bankrupt, thus suspending many new vessel orders which were mostly place before the financial crisis. Aa a result, the newbuilding output level has been much lower than the market expectation. The lower deliveries and continuingly high ship scrapping level has somehow eased the capacity pressure.
It its said that global ship fleet growth is about 100m dwt, more than 10%. However, according to Torvald Klaveness Group, the actual increase volume should be around 65.m to 70m.
The net growth is about 35m dwt, Safe Bulkers CFO Konstantinos Adampoulos says. This is lower than Morgan Stanley’s former expectation 63m dwt, which is right 10% of the fleet and reduces the fleet utilization rate from 77% to 74%.
In 2012, totally 34m dwt elder vessels were scrapped, about 5.5% of global fleet and the highest level in the last few decades. More ships are estimated to be sent for scrapping if current weak freight market continues in the next six to nine months, according to DNB. There is about 90m dwt elder vessels over 20 years can be scrapped currently.
According to DNB, about new vessels of 170m dwt were orders in the peak season in 2007 while the volume were only 20m dwt in 2012.