Business, Freight News, Sea

BIMCO Sees Steady Dry Bulk Market

[ February 21, 2024   //   ]

BIMCO expects the dry bulk market to remain steady through 2025, according to the shipping association’s January Dry Bulk Shipping Market Overview and Outlook.
The dry bulk market will look much like 2023 in each of the next two years, BIMCO said. Supply is expected to grow 1 percent to 2 percent in both 2024 and 2025, while demand is forecast to grow 0.5 to 1.5 percent in 2024 and 1 to 2 percent in 2025.
Coal shipments are expected to fall 6.9 percent between 2023 and 2025, though demand could be curbed though growth in renewables and more hydro power in China.
Iron ore shipments are expected to grow 1 to 2 percent in both 2024 and 2025, as the World Steel Association anticipates a 1.9 percent increase in global steel demand. Increased shipments of iron ore, as well as bauxite and grain from South America and Guinea could have an impact. Likewise, BIMCO expects a recovery of maize shipments to drive 3 percent growth between 2023 and 2025.
Those projections could be downgraded with lower-than-expected economic activity in China and a faster-than-anticipated decline in the coal trade; while vessels’ avoidance of the Red Sea and more steady coal volumes could bolster its forecast.
BIMCO’s forecast mirrors the International Monetary Fund’s, and the World Bank forecasts the global economy to grow 2.9 percent in 2024 and 3.1 percent by the end of 2025.

Fleeting Demand

BIMCO estimates the dry bulk fleet will grow 2.7 percent in 2024 and 1.9 percent in 2025, but lower sailing speeds to reduce greenhouse gas could mute growth to 1 to 2 percent in both 2024 and 2025.
The dry bulk orderbook, currently at 86.8 million deadweight tons (dwt), or 8.7 percent of the current fleet, has 4.1 percent year-on-year, impacted by a 12 percent surge newbuilding contracts in 2025. About half of the vessels are expected to be delivered after 2025, which means deliveries are only expected to reach 33.9 million dwt in 2024 and 28.7 million dwt in 2025.
Panamax and supramax fleets could see the largest growth during 2024 and 2025, and will account for 71 percent of deliveries during those two years.
Ship recycling is predicted to reach 6.8 million dwt in 2024 and 8.7 million dwt in 2025, or only 15.5 million dwt recycled during 2024-25.
BIMCO has about 2,000 members – including shipowners, operators, managers, brokers and agents – in more than 130 countries, representing about 62 percent of the world’s tonnage. It’s next dry bulk forecast is planned for April.

The dry bulk fleet is expected to grow in 2024 and 2025. PHOTO: Mitsui O.S.K. Lines