Golden Ocean Group: Dry Bulk Shipping Market May Rebound Slightly in Q2

OSLO, March 23 (Reuters) – Dry bulk transport constitution charges stay properly under break even ranges, pushing vessel scrapping to report highs, although some market enchancment is predicted within the second quarter, Herman Billung, the CEO of transport agency Golden Ocean stated.

Dayrates have plunged as China’s slowdown decreased its iron ore imports whereas the market is flooded with model new vessels coming into the market, sending the Baltic Dry index to an all-time-low of round 500 factors in February from round 1,600 factors a 12 months in the past.

“It’s pretty brutal what’s happening in the market right now, but in many ways it’s the best medicine for the industry,” Billung informed Reuters in a phone interview on Monday.

Oslo-listed Golden Ocean, a part of transport tycoon John Fredriksen’s enterprise empire, has repeatedly known as on rivals to extend scrapping and order fewer new ship to revive the market’s steadiness.

“Scrapping has been at record levels so far this year with 34 capesize vessels already taken out of the market. That’s more than for the whole year of 2014 and we are only three months in.”

“And if you look at the order book for 2017 it’s empty. No one will order ships in the market we have now, said Billung. “I think we will see the market improving somewhat when we move further in to the second quarter”, he added.

Golden Ocean has all of its capesize ships and round 80 % of its smaller Panamax vessels buying and selling within the spot market.

Even although dayrates for the capesize vessels have fallen to round $4,000 per day, under break even ranges of round $13,000 to 14,000 a day, Billung stated Golden Ocean had the money to outlive.

“We will manage. If you have as much cash as we do then you will make it through in a good way,” stated Billung.

Golden Ocean agreed final 12 months to merge with rival Knightsbridge Shipping Limited. (Reporting by Joachim Dagenborg; Editing by Balazs Koranyi)