Dry Bulk Shippers Will Likely Have to Wait a Bit Longer for Good News

Capesize bulker, MV Semirio, image (c) Peter Karberg, via MarineTraffic.com

(Bloomberg) — Rates for ships that carry dry-bulk commodities will recover later than previously estimated as demand for cargoes slows, according to Fearnley Securities.

Daily earnings for Capesizes, the largest ships hauling iron ore and coal, will average $14,000 next year and $16,000 in 2014, down from previous respective forecasts of $16,000 and $20,000, according to the investment-banking unit of Norway’s second-largest shipbroker. Rates for the vessels have been close to operating costs for about half a year, Lars Erich Nilsen, an analyst at Fearnley in Oslo, said today.

Global trade in dry-bulk raw materials will expand 4 percent this year, the least since 2009, according to Clarkson Research Services Ltd., a unit of the biggest global shipbroker. At the same time, outstanding orders at shipyards equal 23 percent of the current fleet, data from IHS Inc. show.

“Volume growth has been lower than expected for the last few months and supply growth stays at a high level,” Nilsen said by phone today. “There doesn’t seem to be a recovery in this market for quite some time.”

Panamaxes, which can carry about half as much as Capesizes, will earn $11,000 a day next year and $12,000 a day in 2014, Fearnley predicted, cutting its previous forecasts of $14,500 and $18,125.

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