After months of continuing to set new records, the Baltic Dry Index benchmark for the price of shipping bulk commodities, slumped to the lowest in more than three months recently.
Bloomberg reports that the decline comes as Chinese steelmakers scaled back iron-ore imports.
In a recent Barron's report, J.P. Morgan Securities analyst Jonathan Chappell says tight supply and demand in the drybulk market could mean that day rates for the first quarter "will be very strong and that 2008 will be a little better than 2007, which was a record year." But capacity increases in 2009 and further could bring rates down.
Late last month, Oppenheimer analyst Tim Tiberio said in an Associated Press report that "said charter rates for Supramax and Handymax vessels may continue to [decline] in 2008 until the extra supply is made up with returning demand, expected in the first half of next year."
The same AP report also cites Cantor Fitzgerald analyst Natasha Boyden as saying that 2008 may see a bigger than expected decline in drybulk rates, continuing into 2009 and 2010 as a number of new vessels are expected to flood the market.
"The biggest factor in the slowdown of the market will be the order book," Boyden said. "With so many ships expected to be built, we are now seeing 2008 as the peak year."
Drybulk capacity expansions continue, including news today that Star Bulk Carriers Corp has agreed to acquire a total of nine dry bulk vessels, while Eagle Bulk Shipping announced it would buy four new vessels for $42.3 million.
|
