The dilemma of the dry bulk market will continue in 2016

A research paper by Alix Partners shows that in the bulk market, big shipowners' EBITDA (profit before interest, tax, depreciation and amortization) has fallen from $169 million to a loss of $115 million. It is believed that the current market supply and demand is still unbalanced, which also caused the freight rate to fall to the lowest point in history in February 2016. In 2013 and 2014, the bulk market began to encounter difficulties and fell to the bottom in 2015. It may still be struggling in 2016. Especially after the Brexit, the current situation is unfavorable for the bulk and consignment markets. Analysts at Morgan Stanley explained that because both the bulk and consignment markets are in an oversupply situation, most companies face serious funding problems, and Brexit will further tighten debt, liquidity continues to weaken, and many companies The cash flow problem will become increasingly serious. Alix Partners believes that despite the dismantling of many old ships in 2016, the added capacity is still higher than the dismantling capacity. In the first quarter, the bulk market showed signs of recovery, but they are still not optimistic about the bulk market for the rest of 2016.

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