The outlook for dry-bulk shipping remains fragile as new deliveries of vessels are expected to flood the industry next year.
ABC News reported recently the global fleet of dry-bulk carriers was expected to outpace economic demand in 2011. It said this was the result of an industry buying spree two years ago before the financial crisis severely slashed sea trade.
The Baltic Dry Index (BDI), the barometer of commodity shipping, reached an historical high of 11,793 points on May 20, 2008 but six months later – on Dec 5 – it fell 94% to 663 points.
Year to date, the performance of the BDI has been satisfactory, averaging 2,823 points. It hit a high of 4,209 points on May 26 and a low of 1,700 on July 15. On Friday, the BDI was at 2,200 points.
According to a Bloomberg report, Capesize vessels, the largest of commodity ships, would drive the overall fleet expansion, estimated at 21%, while on average the global dry fleet is forecast to grow 15% this year, which might pull down the index.
Unless shipowners delay some of their new deliveries next year, the market outlook is seen uncertain.
Locally, the country’s largest dry-bulk shipping company, Malaysian Bulk Carriers Bhd (Maybulk), recently reported positive results for its third quarter ended Sept 30.