A sharp deceleration in dry bulk trade, coupled with a shipping market oversupplied with vessels, will continue to put downward pressure on the dry bulk freight market at least until the end of the decade, Goldman Sachs said.
“The size of the fleet [Capesize and Panamax vessels] doubled between 2008 and 2015, and the current order books will ensure that shipping capacity continues to grow until 2017, when vessel retirements will finally outweigh new deliveries,” analysts Christian Lelong and Amber Cai said in a research note. […]
The analysts said owners will charge charter rates in a range between their cash cost of operating and the accounting break-even rate. Coupled with lower fuel prices, the cheap freight market should persist until enough older vessels are scrapped to rebalance the market, likely to be beyond 2020. Click here to read more.