In Dry Bulk Market,Hellenic Shipping News 10/03/2017
As the Baltic Dry Index (BDI), the dry bulk industry’s main benchmark has been staging a significant comeback during the past few weeks, demand for second hand bulkers has increased accordingly. In its latest weekly report, shipbroker Allied Shipbroking noted that “with the market looking poised to see a boost during the current month, which could help it reach similar levels to those relative highs noted back in November, it is only reasonable that we have started to see Buying interest amass in the market. Activity in the secondhand market for dry bulk vessels has been heavy for some time now, though relatively little of this had been translated over to prices since the start of the year, with only a 10% average increase having been noted thus far”.
According to Allied’s George Lazaridis, Head of Market Research & Asset Valuations, “things now seem to be on the verge of a shift, with a considerable number of deals now emerging with price indications which definitely point towards a strengthening sentiment amongst buyers and a re-emergence of appetite for speculation. So as things stand now the market seems to be set on an upward course, putting many in the market at ease as they finally see some positive “images” emerging from this once battered market”.
Lazaridis added though that “things aren’t set in stone however. Sure the market has been showing a considerable path towards some sort of recovery and signs from the commodities markets have been giving further confidence onto those who are looking to find the “clear skies and favourable winds” at the end of the “perfect storm”. Prices for many of the main industrial commodities such as iron ore and coal have continued to climb as demand holds firm, while even steel, a commodity which has more than any other felt the pressure from the supply glut, has managed to show a favourable face this year”.
He added that “at the same time a number of recent policies (or trade bans as is the case of the ban set by China on North Korean Coal imports) have given an extra legging and have allowed for a further boost on the market. All this however is riding on shaky and unstable “wheels”, as the recent targets coming out of China’s leadership this weekend emphasises. The decision to lower its growth target down to 6.5% for this year may well be part of its continued push to undertake a number of painful reforms so as to kip a lid on risks in its economy as a whole. However it also highlights the increasing fear that many in its leadership have towards the growing trends globally as to increased protectionism and a closing of boarders to commerce, something that would surely take its toll on an economy still primed to a considerable extent towards export led economic growth”, Lazaridis said.
Meanwhile, Lazaridis said “at the same time things seem to be equally off balance in India, the other main economy in the Pacific which many have come to rely on as a driver for economic growth. Recent issues created by the sudden “demonetisation” policy, along with a longer trending shift in its banks’ business lending strategies leaves for poor indicators as to its economies overall prospects moving forward. For the time being however, things seem to be going on the “right” path. What’s less worrisome for most in the dry bulk shipping is that we are seeing positive trends on the demand side, during leg of “heavy” newbuilding deliveries and given that after the summer period we not only expect to see a considerable slowdown in the number of new vessels entering the market we also expect that regulations will play their part in pushing a new wave of vessels towards the breakers’ yards. Therefore, common sense would have it that even in the case whereby demand starts to stall once again, supply should be even better placed to counter the negative effects and keep the market “in the black”. Nothing should ever be taken for granted in this industry, however for the moment things to be pushing towards a positive outcome”, Allied’s analyst concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
