The Baltic and International Maritime Council (BIMCO) has released a noteworthy report highlighting a sharp decline in new dry bulk vessel orders, reflecting the current softness in the dry bulk market. On December 12, 2024, BIMCO published an analysis by its shipping analyst, revealing that global orders for new dry bulk vessels over the past three months have slowed to a pace 70% below the annual average.
Key factors contributing to this decline include recent drops in freight rates and charter earnings in the dry bulk market, particularly in the Capesize and Panamax segments, as well as persistently high new building prices. BIMCO’s shipping analyst, Filipe Gouveia, stated, “The number of new dry bulk vessel orders in 2024 is likely to fall below that of 2023.”
(Text by Hirofumi Yamamoto)
Photo courtesy of BIMCO
Softening Dry Bulk Market
The backlog of new orders in the dry bulk sector remains relatively low compared to larger container ships, LNG carriers, and tankers.
According to UK-based Clarkson Research, as of November, the total order book for dry bulk vessels—including Capesize, Panamax, and Handysize types—stood at 1,332 ships, compared to the 13,960 vessels currently in operation worldwide. This means newbuilding supply pressure accounts for only 10.3% of current capacity. In contrast, ultra-large container vessels (ULCVs) and LNG carriers face supply pressures of around 50%, highlighting the disparity.
BIMCO observed: “The dry bulk market remained robust until the third quarter of 2024. However, a recent slowdown in China’s import demand, coupled with recovering transit volumes through the Panama Canal, has negatively impacted freight and charter rates. In October, the Baltic Dry Index (BDI) fell by 15% month-on-month and continued to decline in November, ending the month 16% below its level from the previous year.”
Factors Behind Declining New Dry Bulk Orders
The report highlights several reasons for the drop in new orders:
“Shipowners continue to face significant uncertainties regarding market conditions and regulations. Growth in dry bulk demand is likely to slow in the coming years as coal transportation peaks and increased recycling of scrap steel affects iron ore shipments. Additionally, uncertainties remain over which alternative fuels new ships should adopt and their availability at various ports and regions.”
BIMCO further noted that since August 2024, the weakening dry bulk market has caused the price of five-year-old secondhand bulk carriers to fall by 7%. In contrast, newbuilding prices remain high, reducing the appeal of constructing new vessels. Nevertheless, five-year-old secondhand bulk carriers are still being traded at approximately 90% of the average price of newbuilds, according to Gouveia.
Persistent High Prices for New Dry Bulk Vessels
The persistently high prices for newbuilds are attributed to a large backlog of orders in the tanker, container ship, and LNG carrier sectors. These sectors recorded orders exceeding 2023 levels, intensifying competition for limited shipyard slots and adding uncertainty to newbuilding contracts in the dry bulk market. Current contracts for large vessels are expected to result in deliveries as late as 2028.
Despite extended delivery timelines, the Capesize segment was the only category in which newbuilding contracts in 2024 exceeded those of 2023. In terms of capacity, these newbuilds have boosted transport capacity by 42%. Conversely, contracts for Panamax and Supramax vessels have decreased.
Gouveia concluded, “The current backlog of dry bulk orders accounts for 10.4% of the total operating fleet, which is sufficient to maintain fleet renewal in a stable market. Moreover, newbuilding contracts will inevitably rebound in the coming years, as the dry bulk sector faces increasingly stringent climate regulations. This could accelerate the recycling of aging vessels.”
〆BIMCO、ドライ船の新造船発注数、過去3か月間で70%減少
国際海運団体BIMCO（ボルチック国際海運協議会）が興味深いレポートを発表した。新造ドライ船の発注数が足元のドライ市況の軟化を反映して急減しているというのだ。それによると、過去3か月間で、世界の全船主によるドライバルクの新造船発注は年間平均を70%下回るペースに鈍化した。
(Text by Hirofumi Yamamoto)
Photo courtesy=BIMCO
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