Outlook of dry bulk shipping in the next decade

Abstract

Recent tough ride in the dry bulk market has sent investors in jitters. The sector is currently plagued with overcapacity. Following a dreary period since the 2008 financial crisis, investors are seeing some signs of growth in the dry bulk market. The underlying question for now is whether how long this scene will sustain.

This paper explores the outlook of the dry bulk shipping industry within the decade by evaluating market fundamentals and key factors that influence dry bulk shipping on a whole.

The demand side of the equation would examine dry bulk commodities, trade routes and average haul in ton-miles. On the supply side, a forecast on tonnage growth will be analysed based on age profile, fleet growth, orderbook, newbuilding deliveries and demolition activity.

As the macro economy gradually improves, the market starts to see some positivity. Supply has slowed and demand has improved. Considering how notoriously doctored China’s growth statistics can be, the world second-largest economy will continue to gives much impetus to the industry. Supply is likely to crawl at a slower pace, the slowest since 2004. With improved market fundamentals, BDI shall continue to show encouraging growth on a y-o-y basis.