such a development will not improve the fundamental market balance and Supramaxes in particular seem to be challenged by a high inflow of new tonnage. BIMCO said that the order book is currently low, a sign of poor freight market conditions, with 55 million DWT ordered so far in 2014. China is set to build 62% of the dry bulk order book as it currently stands, with Japan in a distant second place, with 27% being placed at Japanese shipyards.
Contracting activity in August was weak, but October/November has been even lower and that has reversed the rising trend of a growing order book. Eighteen months ago, it stood at “just” 135 million DWT, reaching 184 million DWT in July and accounting for 170 million DWT at the end of November. According to BIMCO, getting financing for newbuildings is more difficult than it has been, but as proved so many times before, it is not difficult or expensive enough to act as a restraint. Not only new players are investing; also the “established” household names of the industry are ordering.
The fleet is growing steadily, with demolition in a significant supporting role. Since mid-September reprt, the pace of demolition has been rock steady: 2.75 million DWT has left the active fleet at a monthly average of 136,000 DWT, BIMCO’s data shows. BIMCO’s full year estimate of 14 million DWT scrapped this year will thus be just a little shy of the final amount when the year closes. “It is peculiar that Handymax is the segment with the lower level of demolition activity, as that segment in particular will see a strong influx of new ships in 2015.
For owners and operators that may seem like the distant future, as they are simply trying to make the best of a bad market,” the association added. Based on BIMCO’s forecast for December/January, the Capesize TC average rates will be in the interval of USD 5,000-15,000 per day. Panamax TC average rates will stay around USD 6,000-10,000 per day. For the Supramax segment, BIMCO forecasts freight rates in the USD 7,000-11,500 per day, whereas Handysize freight rates are expected around USD 5,500-7,500 per day.
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