Anticipating volatility given the recent developments in US trade policy, London Stock-listed dry bulk shipowner Taylor Maritime Limited (TML) took advantage of seasonal improvements in sentiment to accelerate divestments with eleven new vessel sales announced on Friday, April 25, and a previously announced sale completed during the quarter.
The company taken into consideration the recent developments in US trade policy, has published its latest dry bulk market review and outlook.
According to the company, charter rates remained subdued in January, reaching a low point during Chinese New Year, before rising gradually through to the end of the quarter with US tariff announcements seemingly having a limited direct impact on dry bulk trade.
Second-hand asset values followed a similar trajectory to charter rates over the course of the period yet remained well above historical averages, proving resilient in the face of broader market uncertainty.
Lack of clarity concerning proposed levies on US port calls by China-linked vessels did, however, impact liquidity, Taylor Maritime Limited noted, with trading of Chinese-built second-hand vessels slowing during the quarter while Japanese-built ships experienced higher turnover.
The US Trade Representative has since clarified that Chinese-built bulker vessels under 80,000 dwt, which encompasses the handy and supra/ultramax segments, are exempt from the new measures.
“The direct impact of tariffs on dry bulk trade has so far been limited,” the shipowner said. However, the US Administration’s announcement of further tariffs in early April and retaliatory measures taken in response, particularly by China, have increased uncertainty and led to concerns over broader macroeconomic deterioration.
“Should trade frictions escalate and lead to lower industrial activity and global GDP growth, the dry bulk sector could face less demand than previously forecast. Retaliatory tariffs, however, may also result in a rerouting of trade routes with a potentially positive impact on tonne-mile demand,” Taylor Maritime Limited said.
According to the company, while short-term demand uncertainty has increased, the medium-term outlook remains positive given supportive supply-side dynamics.
Fleet growth is expected to remain modest by historical standards with net supply growth forecasts for the geared dry bulk segment of 4.4% in 2025 according to Clarksons, following several years of limited ordering and newbuilding activity.
Meanwhile, a significant portion of the global geared dry bulk fleet continues to approach scrapping age, with 10.5% of the current handysize fleet and 5.7% of the current supra/ultramax fleet reaching 25 years or older in 2025.
Relatively firm freight market rates in recent years have led owners to keep older vessels in service, however, with a softer 2025 in play, scrapping activity may accelerate, providing further support to the supply side, Taylor Maritime Limited highlighted.
