LONDON Dec 7 The worst is over for the dry bulk
shipping sector, after years when too many ships chased too
little cargo, yet the extent of the lost business means a full
recovery is still some way off, leading ship owners said on
Dry bulk shipping, which transports commodities including
coal, iron ore and grain, has been among the worst performing
shipping segments in recent years, partly due to worries over
the health of top industrial goods importer China.
Some companies have gone to the wall - and the collapse of
South Korean container shipping group Hanjin in August was
partly due to its additional exposure to dry bulk.
In recent weeks, sentiment has improved as the number of
ships set to hit the water next year is projected to fall and
industrial demand improves.
"Nobody is saying we are going to have a fantastic booming
market, but we are past the worst and we are into a more
fundamentally balanced situation," Mats Berglund, chief
executive of Pacific Basin, told a Nordea Markets
shipping seminar in London.
Last month, the Baltic Exchange's benchmark main sea freight
index, which gauges the cost of shipping dry bulk
cargoes, rose to its highest in nearly two years.
"We are finally starting to see the light at the end of the
tunnel. We have been talking about it for years. We are now
getting to a point of probably more normalised demand growth,"
John Wobensmith, president of Genco Shipping, told the
seminar, adding that the recovery would not be "a straight
Ioannis Zafirakis, chief operating officer with Diana
Shipping, said the market still needed at least eight
months to a year of higher rates to gauge whether current
conditions would make "a real change in the charter rates".
Dry bulk shipping turned down in 2008, after the onset of
the financial crisis, and has remained volatile since then.
Earlier this year, dry bulk rates slumped to their lowest
Ship owners cautioned that there was still a risk of
speculative new ordering if rates stayed firm.
Gary Vogel, chief executive of Eagle Bulk Shipping,
urged industry restraint, saying "the world does not need more
dry bulk ships".
Genco's Wobensmith added: "We will have a recovery and once
again somewhere down the road we collectively as an industry
will overbuild again, unfortunately."
(Editing by Ruth Pitchford)