Year-end dry bulk rally collides with overcapacity

The Panamax/Kamsarmax bulk carrier segment looks particularly exposed, with roughly 16M dwt scheduled for delivery and coal trade fundamentals described as weak, while a 12M dwt Handymax orderbook also points to an oversupply risk.

Scrapping has done little to offset this incoming tonnage, with Clarksons estimating only 11M dwt had been sold for recycling year-to-date, 33% above the 2024 run-rate but still 56% below the 10-year average.

GMS described sub-continent recycling markets as ’lowly’, with many bulk candidates attracting less than US$400/ldt as volatile steel prices, weak currencies and limited yard capacity kept prices in check.

Bangladesh continued to offer the highest levels, around the low US$400s/ldt for larger, good-quality units, but overall supply of bulkers to yards remained sparse.

GMS noted that, structurally, the recycling sector was still adjusting to the Hong Kong Convention with Pakistan’s Prime Green Recyclers becoming the first HKC-compliant yard in Gadani after Bureau Veritas approval, while GMS reported that 21–22 Bangladeshi yards have already secured accreditation and Indian yards have held HKC status for years.

Yet with demolition economics unattractive, these investments have not yet translated into significant bulker removals.

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