with last year’s same period, at 156.4mt.
The grain (including soya) trade also provides extensive
Handymax bulk carrier employment, featuring highly variable and
unpredictable changes in geographical patterns and quantities.
During the past crop year ending mid-2015, global trade in
wheat and coarse grains, and also in soyabeans and meal,
increased robustly, but over the current year ending mid-2016
some negative factors are likely to weaken global import
Contributing to recent strength in grain and soya movements
were higher imports into many countries, facilitated by abundant
export supplies around the world and lower international prices.
According to International Grains Council calculations, global
trade in wheat plus corn and other coarse grains increased by
12mt (4%) in crop year 2014/15 ending June, reaching 322mt.
Global trade in soyabeans and meal was 12mt (7%) higher in
marketing year 2014/15 ending September, at over 181mt, based
on US Dept of Agriculture estimates.
Over the past twelve months, Handymax grain trade
employment opportunities benefited from larger imports into
Africa and Middle East countries, while China and other Asian
countries raised their purchases. Involvement in the soya sub-
sector was supported by China’s continued upwards import
trend, as well as increased volumes into other parts of Asia, the
European Union and elsewhere.
During the year ahead, 2015/16, the upwards trajectory of
world soya movements is expected to persist, as China and
others buy additional cargoes. Conversely, global wheat and
coarse grains trade could see lower imports into a wide range
Numerous Handymax size bulk carriers regularly carry minor
dry bulk cargoes. Many elements of this group of commodities
are large, not small and collectively amount to massive annual
volumes. The commodity range is wide and, until last year when
the total is estimated to have reached over 1,500mt, growth had
been rapid for several years. But in 2014 the overall increase
apparently was minimal.
Steel products trade (coil, sheet, plate and other items), and
forest products trade, are the biggest individual minor bulk
components, although not all quantities are carried by bulk
carriers. Bauxite/alumina for the aluminium industry, fertilizer
raw materials and semi-finished fertilizers, cement, as well as
ores and minerals such as nickel and manganese ore, together
provide very big tonnages.
As an example, Handymaxes frequently carry steel products
exports from China. This trade has expanded strongly over the
past two years, amid slowing Chinese domestic steel
consumption and surplus capacity. The annual total of China’s
steel exports to all destinations jumped by 51% to reach just
under 93mt in 2014, and could exceed 100mt this year. In the
first nine months of 2015, reportedly the volume rose by 27%, to
THE ULTIMATE HANDYMAX
Over the past two years, Ultramax bulk carriers of
60–65,000dwt, at the top end of the Handymax size range,
became the principal focus of attention for shipowners investing
in new Handymax tonnage. Despite the abrupt downturn in
contracting activity seen this year, Ultramaxes continue to
dominate the global order book and future delivery schedules, as
a result of the heavy ordering seen in 2013 and 2014.
A typical Ultramax provides a 63,000 or 64,000 total
deadweight capacity, and is equipped with the standard cargo-
handling gear of cranes and grabs for loading and discharging at a
berth or anchorage. These new designs also offer another
attractive economic advantage, which was even more valuable
when fuel costs were much higher up to almost the end of last
year: improved fuel efficiency is a key feature.
The advantage possessed by an Ultramax is clearly seen in
trades where a cargo of around 60,000 tonnes — often coal, or
minor ores or other bulks — needs to be lifted from barges at
an offshore transshipment terminal and then discharged at a
similar installation at the other end of the voyage. This
employment pattern occurs in many shorter haul trades within
the Asian region and elsewhere. The Ultramax can self-load and
self-discharge, but if an older gearless vessel is used, such as a
panamax of similar capacity, a floating crane is required,
significantly raising transportation costs.
Chinese shipbuilding yards in particular marketed standard
Ultramax designs which have proved popular. The ‘Crown 63’ of
63,000dwt and the ‘Dolphin 64’ of 64,000dwt were seen by
shipowners as likely to prove efficient and potentially profitable,
resulting in the yards obtaining many orders.
Expectations of expanding cargo volumes available for
Ultramax size bulkers underpins interest in these vessels. In
some trades, individual cargo sizes commonly lifted have been
increasing. The Supramax, typically 52–57,000dwt, was the
preferred sea transport unit until quite recently, compared with
small Handymaxes up to 50,000dwt. But a ship able to carry a
somewhat larger cargo volume while remaining within other size
restrictions is now seen as widely employable. Commodity
trades to Asian destinations, often intra-Asian trading, are a
particular focus of attention.
A SUBDUED HANDYMAX MARKET
Freight rates for Handymax bulk carriers have been weak this
year, reflecting continuing surplus capacity in this and other
vessel size groups. Sustained rapid enlargement of the world
Handymax fleet, amid slowing growth in some key bulk trades
employing these ships, has resulted in generally subdued market
During the first quarter of 2015 Handymax freight rates fell
steeply to very low levels. The Baltic Supramax Index dropped
below 500 points. In subsequent weeks a modest revival
ensued, gaining momentum after mid-year when the index
remained above 800 for several weeks. Renewed weakness was
seen during September and, by mid-October the BSI had
declined to below 700 points.
What is the outlook for this market sector over the next
twelve months? Although the Handymax category is a distinct
market sector, it is not isolated from the bulk carrier market as
a whole, where considerable over-capacity looks set to persist
for some time. There are signs of further slowing in overall
world bulk carrier fleet growth during 2015 (although not in the
Handymax category), bringing it more into line with previous
expectations of trade expansion. But indications now clearly
suggest that trade is not increasing as expected earlier, and is
actually decelerating markedly.
Slowing global seaborne trade development recently, and few
convincing signs of a robust pick up next year, has intensified
uncertainty about the future freight market trend. Also, it is not
altogether certain that a further slackening of bulk carrier fleet
growth will be seen in 2016. For the Handymax sector
individually, deadweight capacity may continue expanding quite rapidly next year. So a sustainable solid improvement in freight rates may remain elusive in the near term future.