The ratio of newbuilds to the extant dry bulk fleet has slipped below 10% for the first time since 2002, according to Allied Shipbroking.
The last time the orderbook ducked under this level heralded the start of the incredible dry bulk super cycle from 2003 to 2008.
With hardly any newbuilding orders placed for dry bulk carriers this year, and slippage and cancellations of existing orders still close to 40%, Allied suggests this has helped pick rates up given how the rate of scrapping has dropped in the second half of the year.
George Lazaridis, head of market research at Allied, noted that at the very start of the year the dry bulk sector was looking at an orderbook to fleet ratio of roughly 15.92% for all dry bulkers above 20,000 dwt. Based on Allied’s data, at the start of November this ratio had dropped to 9.79%.
“Beyond the fact that it has now broken through the psychological point of 10%, what makes this figure even more noteworthy is that it the lowest it’s been in over 14 years. The last point in time when we had a ratio at similar levels was in 2002, after which point it quickly climbed at an extraordinary rate to reach its peak in September of 2008,” Lazardis noted.
