Fewer orders, modest value drops expected in dry bulk this year

In its latest weekly report, Greece’s Allied Shipbroking revealed that bulk carrier orders for 2024 reached nearly 49M dwt, representing an estimated investment of US$24Bn. This marks a 10% decrease from 2023 and a 9% dip compared with 2022, although it remains 28% higher than 2021 levels in terms of contracted dwt.

Despite persistently high shipyard prices, shipowners continued to place new orders, drawn by positive freight market dynamics.

With substantial investments in newbuildings in recent years, the current dry bulk orderbook now accounts for approximately 11% of the existing fleet.

However, Allied Shipbroking expects investment sentiment to slow this year, as indicated by already-registered newbuilding deals. Analysts note that, in January 2025, vessels with capacities of 130,000 dwt were contracted, a significant drop compared with the 5M dwt contracted in the same month last year.

Allied Shipbroking identifies two key factors contributing to the anticipated cooling of the newbuilding market. First, newbuilding deliveries are expected to increase by 14% in 2025 compared with 2024, with an even more significant 19% increase forecasted for 2026, in terms of dwt. 

Second, the freight market is not expected to remain as robust. “While China’s stockpiling and geopolitical disruptions absorbed 2024’s increased deliveries, a lack of demand growth in 2025 could lead to lower freight rates, which would diminish the incentive for further investment,” analysts explained.

Modest drops in asset values

Riviera has reported that both newbuilding and secondhand vessel prices have been adjusting downward in recent months. Data from Allied Shipbroking shows prices for Capesize, Panamax, Supramax and Handysize newbuildings have declined by around 3% to nearly 12% over the past three months. Meanwhile, secondhand values across all vessel segments and age groups have dropped by between 1% and 17%.

Allied Shipbroking anticipates the gap between freight rates and asset values to narrow further. “Freight earnings have been robust, supporting asset prices, but the market is shifting toward a more balanced phase,” analysts noted.

Despite this, newbuilding prices are not expected to experience sharp declines, as shipyards are operating at constrained capacity due to significant investments in gas carriers, which limits the potential for major price reductions.

In the secondhand market, analysts believe values for modern eco-tonnage will be more insulated from declines than for non-eco vessels. This is because shipowners are prioritising fleet renewal in response to regulatory pressures and efficiency-driven demands. Citing recent transactions, Allied Shipbroking notes the price spread between eco and non-eco tonnage has now exceeded 15%.