1997 Should Be Another Bear Year for Dry Bulk Ocean Freight

by Dr. Martin Stopford, Clarkson Research, London

A year ago, in December 1995, the dry cargo market was just waking up to the harsh reality of a 35m dwt orderbook and a weak trade outlook. The turn was pretty much as expected. By the summer, Capesize rates had slumped to less than $9,000 pd, whilst Panamaxes were crawling along at $4,200 pd – a disturbing reminder of the grim summer of 1986. Perhaps it was this association which triggered a very prompt response by bulk carrier owners. As rates fell, almost 7m dwt of combined carriers switched out of the dry market, 4m dwt destined for the scrap yard, and 3m dwt switched into oil. Most of this was Capesize tonnage.

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