Bulkers hit black hole

From 1992 to 1997 the bulk carrier fleet grew at an annual rate of 4.8 per cent to reach 264 million dwt. That situation has now changed.

If the health of world trade is dependent on the state of the bulk trades, then it is very unhealthy at the moment. Views on the outlook for bulk cargoes vary between pessimistic to depressed and commentators see little hope for an upturn in the short term. There is no evidence of sustained growth in the market.

Freight rates are low and there are still plenty of bulkers on order, although few have been ordered recently. Rates are around $9,000/day for capesize ships. Comments Stena Bulk: “If you think that tankers are suffering, then this is nothing compared with the situation in bulkers.” It adds that some operators are looking to take cargoes at any possible rate in order to defray costs.

Intercargo, however, believes that the poor market may have a positive effect since it will put greater pressure on operators of sub standard ships. It argues that they will be unable to continue to function in the present climate. However, the organisation concedes that some good owners may also disappear if they are less well financed.

By contrast some argue that the situation could lead to quality being compromised. Recently there have been a lot of changes to the construction rules, and classification societies are fighting for business. This has led to a lot of rhetoric by the various societies on the maintenance of quality, but some owners are sceptical about the ability to hold this stance.