Fresh challenges seen for dry bulk recovery

New vessel orders and slower Chinese growth expected to influence dry bulk recovery.

{reg}[PAID={"id":"12,13,14","title":"The content you tried to access is only available to paid subscribers.","link":"1"}]In the dry bulk segment, a flood of orders for new vessels and slower Chinese demand-growth for commodities could derail a recovery, reports Reuters.

As dry cargo shipping rates recover from 14-year lows touched in March, shipowners have splurged on a raft of new orders, taking advantage of cheaper prices, more fuel efficient designs and money from private equity funds looking for a new home.

According to the report, the rise in capacity comes at a time of slowing economic growth in China, which has raised fears that its vast appetite for imported raw materials such as iron ore and coal may start to wane.

"The ordering wave is indeed worrying," said Henning Oldendorff, chairman of Oldendorff Carriers, one of the largest dry cargo operators with about 400 owned and chartered ships.

He estimated some 35 million dwt of new capacity was ordered during the first half of 2013, well above the 22 million dwt ordered during the whole 2012.

More than 50 percent of recently ordered tonnage was contracted at just a handful of Chinese shipyards, figures from Norwegian shipbroker Fearnleys show.{/reg}