Bulker owners are in for a tough year, according to shipbroking group Fearnleys, which forecasts zero demand growth for the sector in 2025.
Dry bulk analyst Bernhard Baardson said challenges will come due to the strong US dollar, high interest rates and the time lag before Chinese economic stimulus measures affect bulker demand.
Manufacturing activity last year performed worse than services, a trend that will continue this year and is symptomatic of a weaker global economy, Baardson said, speaking at the Astrup Fearnley Shipping & Energy conference on Wednesday.
And iron ore and coal inventories at Chinese ports are at high levels, which will limit further imports.
Coal inventories are at particularly high levels, following Chinese energy security policies since 2021.
“If there’s one factor that is the most bearish thing for the dry bulk market this year, it is the coal inventories, since that could spell a lot of weakness in the Pacific markets,” Baardson said.
“Most analysts are forecasting a drop in China’s coal imports … this year as a result of that.”
Meanwhile, stagnant demand will be outpaced by 3% growth in the global bulker fleet, with some segments growing even more.
Fearnleys forecasts earnings in the low teens for handysize, supramax and panamax this year.
Capesize earnings are expected to be around $15,000 per day, Baardson said.
The picture could improve in 2026, but the analyst said clear signs of this are still lacking.
The strengthening dollar has had a big impact on dry bulk shipment volumes.
A 5% year-on-year rise in the dollar index will translate to 0% growth in dry bulk shipment volumes this year compared with last year, Baardson explained.
“That’s the current indication from the dollar and we actually see it already in preliminary data for January, with AIS data and so on,” he said.
He added that US President Donald Trump has indicated he wants to weaken the dollar, but there are few clues as to how this may be done.
Dry cargo market watchers have pinned their hopes on a revival in demand this year following economic stimulus measures announced in September by China, the world’s biggest demand hub.
Baardson said there is typically a nine to 15-month lag before stimuli in China translate to an uptick in bulker demand.
Financing growth in China also feeds into this after about 12 months but activity will need to make a meaningful comeback.
“Since it’s a lead, it gives an indication that we will see continued weakness from that front impacting dry bulk markets through this year because the financing growth is now around minus 10%,” he said.
“The most interesting thing will be to see how these financing numbers will be now in January, the numbers will be released next month.
“Seasonally, it’s always in January when you have the highest financing number, so if that number is very high, then at least you could start maybe counting down to when the next stimulus will impact job markets.”
Baardson said it will be “very important” to follow China’s lending growth in the coming months.
He also pointed to the strong correlation between the US dollar and Chinese yuan currency pair, which is tracked by growth in Chinese dry bulk imports after around a nine-month time lag.
“We might be in the early stages of seeing a weakening of the yuan,” he said.
This strengthens the case for 0% demand growth for dry bulk shipping this year.
Fearnleys forecasts a 5% net growth in the global supramax and ultramax fleet this year, the biggest rise in any segment.
The global handysize fleet and the panamax/kamsarmax fleet will grow by 3% in 2025.
The capesize fleet is expected to grow by 1.8% this year, which Baardson described as “low”.
