Hello, Dear Reader, and welcome to another content-filled issue of Dry Bulk. And there’s certainly lots to talk about. For example, according to a recent report from BIMCO, the number of recycled bulk ships fell by 42% over the period of January to August this year, marking a 16-year low point. So far in 2024, just 45 ships have been recycled, accounting for 2.5 million dwt and just 0.2% of the overall fleet. The culprit? A strong dry bulk market. BIMCO Shipping Analyst, Filipe Gouveia, attributes the fall in the recycling rate to: “high freight rates and strong demand, delaying the recycling of older ships. On the supply side, the fleet has continued to grow slowly, limiting fleet renewal.”
The last three years have seen a series of demand shocks contributing to this trend. These include sanctions on Russian coal, and vessels being rerouted away from two of the world’s major shipping arteries, the Suez and Panama canals, greatly increasing sailing distances and keeping vessels at sea for far longer. Other factors include low deliveries and limited new-build contracts across the sector as high prices and uncertainty weigh in.
So, what does that mean for the sector? Well, according to Gouveia, “In the short term, fleet renewal will not be a significant challenge for the sector. The fleet is at its oldest since 2011, but only 9% of capacity is 20 years old or above.”
Looking to the medium and long term, however, Gouvia flags several factors are likely to weaken the market meaning that “less competitive ships that would have been recycled over the last three years will likely be phased out.”
The first of these is the return to normal transit levels through the Panama Canal and Red Sea. And then in the medium term, “stricter climate policy will further encourage recycling” as shipowners move to cull older, less efficient vessels from their fleets in order to meet new regulations.
Speaking of changes at the Panama Canal, be sure to check out the article on pg 52 from Javier Ho of the Panama Canal Authority. This item not only outlines the Canal’s reaction to the twin challenges of climate change and El Ni–o but also provides some updates on the future of one of the world’s most important transit routes.
And, of course, that’s not all. This issue is packed full of editorial, including our Regional Report from Drewry (pg 10), which takes an in-depth look at the European dry bulk market and considers the dual impact of rising renewable energy usage and declining coal demand. Other highlights include our Shiploading & Unloading Q&A (pg 32), where we’ve gathered expert insights from some of the leading players in the sector: Bedeschi, Samson, Telestack, and VIGAN Engineering. And we’re also running articles covering Domes & Silos, Material Sampling, Port & Terminal systems, Lubrication, and Bagging & Packing.
I hope you enjoy the issue!
