Volatility in dry bulk spotmarket to decrease

“The reality with tonnage coming in is that we’re seeing freight rates go down and we’re going to see far more ships than we want,” Braemar Shipping Services chief executive Alan Marsh told a press briefing yesterday.

Although this might not come as good news to owners who risk operating in the spotmarket to take advantage of spikes in prices, more vessels available to hire creates more business for shipbrokers.

A record 1258 newbuilding dry bulk carriers, tankers and boxships are understood to have entered service in the year to date, causing the fleet for these three major sectors to grow by over 5%.

With huge orderbooks still to deliver and owners continuing to contract vessels at shipbuilding yards, despite the impact of vessel oversupply already being evident in the chartering markets, the situation for owners does not look good.

In contrast to South Korean yards, Chinese shipbuilders do not appear bothered by what is happening with their customers and the excess of tonnage available.
“Chinese newbuilding yards continue to build, build, build - they’re not in shipping and have no interest in shipping - they are manufacturers that just happen to manufacture ships,” Mr Marsh said.

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