Outlook for the dry bulk sector
Chong, Si Qi
Date of Issue2017-05-12
School of Civil and Environmental Engineering
The dry bulk market has been treading in tumultuous water since early 2015. Information and a clear outlook is indispensable for stakeholders to make their strategic decisions. Previous research done merely addressed issues up to 2018 and failed to paint a full picture of the situation. As shipping assets have a long life time, a much extended and holistic view for strategic planning. Thus, this report aims to amalgamate critical information and provide an outlook for the dry bulk sector for the next five years. Information was derived from both primary ( Report, articles and journals) and secondary sources ( Industrial professionals). Through the analysis of the supply and demand fundamentals and an analysis of the break even rate and period for each vessel size, a conclusion was reached about the outlook. Across all dry bulk sectors, outlook is optimistic with demand growth expected to exceed the slow fleet growth in the next 5 years. The gap between the period rates and break even time charter equivalent is also closing. For vessels with lower capital cost, such as those purchased second hand in 2016, vessel owners of Capesize , Panamax, Supramax and Handysize can expect a slight profit from 2018 onwards. Further studies should place more emphasis on the analysis of the minor bulk demand. Vessel sizes, which operate regionally such as Seawaymax, Kamsarmax, Setouchmax,Dunkirkmax, and Newcastlemax should be examined. Other indirect indications of outlook such as the second hand values and new building prices could also be examined.
Final Year Project (FYP)
Nanyang Technological University