By Jonathan Saul

LONDON, May 25 (Reuters) – Shipping corporations transporting coal, and iron ore and different commodities are urgently in search of methods to preserve money and stand up to the worst market downturn on document as too many ships chase shrinking enterprise.

A scarcity of financing – estimated at $30 billion and prompted partially by banks slicing lending to sectors resembling transport – has additionally damage corporations, sending some to the wall.

“The overall prospects for the dry bulk market are fairly dark – it seems that there is little faith in the market for a recovery. The market mood deteriorates by the day, despite the recent improvement of the Baltic Index,” stated Basil Karatzas, head of consultancy and brokerage Karatzas Marine Advisors & Co.

The Baltic Exchange’s important sea freight index, which tracks charges for ships carrying dry bulk commodities, earlier this 12 months crashed to an all-time low of beneath 300 factors.

While it has moved as much as simply over 600 factors of late, the index – which world buyers look to for modifications in sentiment for industrial demand – remains to be practically 95 % down from its all-time peak in 2008.

“Owners should be prepared to face a market which does not improve until 2018 but hope that improvement comes earlier,” stated Tony Foster, chief government of British transport asset supervisor Marine Capital.

In March, Mitsui OSK Lines, considered one of Japan’s largest transport teams, stated it might restructure its dry bulk enterprise to chop prices together with scaling again operations and promoting ships.

Others have sought to achieve understandings with their banks. Greek dry bulk group Globus Maritime reached settlement with two of its banks on waivers to mortgage covenants in addition to deferring mortgage funds due this 12 months.

Chief government Athanasios Feidakis stated it hoped this might assist “alleviate some of the pressure we are facing due the current market conditions”.

“The sentiment in the market is bad and the flow of operation and business is not normal. Hopefully, we will not have any more casualties,” Feidakis informed Reuters.

“It is very hard for many companies to survive this cash burn, especially if they don’t have a substantial cash reserve or strong investors backing them.”

Norwegian transport agency Bulk Invest filed for chapter in March after failing to win backing for a monetary restructuring.

Lithuanian Shipping Company, based in 1969, is at the moment being liquidated, its chapter administrator Dalius Volskis informed Reuters. The agency’s fleet of 5 vessels are being auctioned off with three ships already bought, Volskis stated.

Some corporations have gone non-public to chop out the price of sustaining public inventory listings. In latest weeks Hellenic Carriers and Goldenport Holdings introduced de-listings from the London Stock Exchange. They declined additional remark.

While extra ships are set to hit the water into 2017, demand for strategic commodities is weakening in main buyer China.

“That means the imbalance gets worse rather than better,” a transport supply stated. (Editing by Ruth Pitchford)

(c) Copyright Thomson Reuters 2016.