Freight rate peak for 2016

The supply/demand imbalance that drove dry bulk markets down to 2009 levels during the first half of the year is set for adjustment, with Newport Shipping Group predicting an improved tonnage balance, resulting in a freight rate peak in the 2016/2017 period. Harald Lone, chairman of Newport Shipping Group, said “Strong supply growth combined with a decline in most of the major coal trades pushed spot earnings for Panamaxes to just above US$3000 per day in Q1 2014, well below operating costs. The markets are still soft, with average spot earnings in 2014 down by 10% on 2013, with Panamax rates down as much as 22%.” And although a spate of new build orders in the 2013/2014 period could prevent a near term rebound, “freight rates and ship values are likely to rise slowly then peak during the 2016/2017 period”.