The brief recovery in the dry cargo charter market at the end of 2014 was short lived with the Baltic average Handy-size charter rates falling dramatically during the course of 2015 from $7,250 a day in early January to the current rate of $4,150 day, well below operating cost. This reflects the steep decline in commodity markets, resulting in cargo volumes drying up and rates declining, making 2015 a tough year for shipowners and operators, such as MACS and Galborg, in multipurpose and project markets.
The drop in oil and bunker prices during the course of the year gave some respite to shipowners, albeit a double-edged sword, as this also resulted in reduced volumes of pipe and oil and gas project cargoes being shipped.
The weakening market conditions mentioned above will be exacerbated by a growing fleet of dry cargo and container vessels, meaning that 2016 looks set to be an even more challenging year. This will no doubt result in further consolidation and merger activity, particularly among carriers that are not broadly diversified, or those operating with highly leveraged fleets.