Shipping will remain volatile and indispensable in 2016

The Baltic Dry Index dropped to an all-time low in December last year, and has fallen still further this month. Most people blamed this on China for not consuming as much of anything as it did previously. Nevertheless, the dry bulk sector will probably have to reduce the newbuilding orderbook and increase ship recycling in 2016 in order to restore the balance.

Shipping will remain volatile and uncertain throughout 2016. Operating costs will go up, as will the cost of regulation – for example, implementation of the Ballast Water Management Convention. The threat from cyber security will rise. The effect of geopolitical developments should not be under-estimated.

Now is nevertheless a good time to invest if you have access to finance and a credible business plan. It is no coincidence that IMO recently endorsed a proposal to adopt ‘Shipping: Indispensable to the World’ as the theme for World Maritime Day 2016.

Source: Moore Stephens 07/01/2016