Wall Street equity analysts Natasha Boyden slashed her freight rate forecasts in 2015 response to this fear but argued that a rebound could materialise sooner than some might think.
Natasha Boyden told clients that the dry-bulk segment should experience what she described as “moderate rate improvement” in 2015.
Natasha Boyden believes that fleet capacity will increase by approximately 6.0%, and pointed out that this is well below the highs seen between 2010 and 2012.
Natasha Boyden is concerned that scrapping could slow as a result of declining steel prices she is confident that 2% of the fleet will be sold for recycling by the end of this year.
Natasha Boyden acknowledged that demand has been sluggish as of late but argued that it hasn’t shown “real signs of compression” like it did in 2008 and 2009.
Natasha Boyden said: “Global iron ore shipments are still increasing substantially and strong Chinese demand for minor bulk commodities continues relatively unabated. In order to maintain GDP growth around the official target of 7.5%, the Chinese authorities appear to be easing credit in order to accelerate growth momentum. Just as important, while short-term overcapacity in the mining sectors in Australia and Brazil has caused ore prices to plummet, companies such as Vale have yet to announce any slowdown in future investment plans.”
Natasha Boyden believes there is a chance that the tides could turn in the second-half of 2015. “We believe it’s possible that supply pressures could ease substantially and rates could then begin a sustainable rebound,” she said.
Natasha Boyden did admit that she no longer thinks the improvement will be “substantial”, but rather “softer and more moderate”.
Natasha Boyden forecasts Day rates in 2015:
In the capesize, panamax, handymax and handysize segments the forecaster believes day rates will average $16,500, $11,000, $10,500 and $9,000, respectively, in 2015.