According to BIMCO, the dry bulk market faced a lot of headwind in 2015 as dwindling demand and over-supply created very unfavourable market conditions. 2016 has shown no improvements so far and prospects for the rest of the year are not looking promising. With poor earnings across the board the average scrapping age has dropped among all the dry bulk segments.
The capsize segment especially has seen a big drop in the average scrapping age; dropping almost four years from an average age close to 25 in 2014 to less than 21 in 2015. This is the result of a record amount of capesize tonnage that was scrapped in 2015.
Chief Shipping Analyst, Peter Sand says:
“Despite a relatively low demand for scrap steel in 2015 the demolition of dry bulk ships was high compared to previous years, and the capesize segment was the leader of the pack.
A total of 15.5 million DWT of capesize tonnage was sent for demolition in 2015 – more than half of the total 30 million DWT of dry bulk tonnage scrapped.
The extensive demolition activity within the dry bulk shipping industry is expected to continue to climb through 2016. So far, the year has already started well with 4.6 million DWT scrapped in January alone. This increasing demolition is a very welcome development, but a lot more ships need to be scrapped in order to improve on the unfavourable market conditions present in the dry bulk market.”
Click here to read full analysis on dry bulk market by BIMCO
