| Precious Shipping: BDI does not tell our pain |
| The Baltic Dry Index (BDI) may have reached an all-time low this year. Even so, taking into account the inflation since the previous historic low in 1986, the index does not give the whole picture of the pain of bulker owners, said Precious Shipping managing director Khalid Hashim. The BDI reached 509 points in February, breaching the last low of 544 in August 1986. Speaking at a pre-Sea Asia press conference in Singapore on 8 April, Hashim said, “If you equate the costs at that time, 544 points [in 1986] should be 711 points today. So if you look at that, you can see that we’re almost 40% below the last all-time low. So you can see the pain the industry is going through.” An oversupply of newbuilding deliveries resulting from a wave of orders in 2013 has combined with slowing iron ore and coal demand in China. IHS Maritime's Sea-web.com data show 966 dry bulkers of 20,000 dwt upwards will be delivered, following a newbuilding order spree in 2013, when the BDI rallied in its last two quarters. Shipowners and other investors then saw a sustained recovery, with bunker prices climbing higher, and succumbing to the hype of much-talked-about fuel-efficient ‘eco’ ships. In 2013, China imported 328.5 million tonnes of coal, an all-time record. Imports fell to 291.6 million tonnes in 2014 and are expected to drop again this year. Hashim said, “China’s coal imports could be 30–50 million tonnes lower [this year] than what they were in 2014. So if you think 2014 was difficult, we still might have a more challenging time in 2015.” He added that dry bulk shipping has not really seen a sustained recovery since the 2008 global financial crisis. Hashim said, “In our industry, 2007–08 were fantastically good years. Shipowners are our own worst enemy and we don’t need anyone to hurt us= 2E” The good years caused shipowners to go on a newbuilding spree, resulting in a compound annual growth rate of 12–13% of fleet deliveries thereafter. |