The outlook for dry bulk shipping rates has been grim because ship supply has outpaced demand for shipments of commodities.
SSY, one the world's biggest ship brokers, said 35 capesizes had been scrapped so far this year.
"We have also had another 11 sales of capesizes for scrap, but they have not actually reached the breakers as yet," said Derek Langston, a senior director at SSY Consultancy and Research.
"Those 35 that have already reached the ship breakers in the first five months of this year have already surpassed the previous annual record of 24 capesize ships being scrapped in 1996," he told Reuters.
Average capesize earnings have fallen to below $5,000 a day this year, below operating costs estimated at $7,500 to $8,000 a day, compared with over $200,000 a day before the economic turmoil in 2008. They reached $9,758 a day on Thursday, Baltic Exchange data showed.
SSY estimated that new building deliveries this year would total over 90 million deadweight tonnes (dwt) compared with 78.7 million dwt last year.
Net fleet growth was forecast to reach over 70 million dwt this year even allowing for record scrapping levels, Langston said. Net fleet growth last year was 76.8 million dwt.
Langston said 105 capesizes had entered the fleet since the start of the year, with a further eight ships converted from tankers into capes. That compared with 214 capes delivered last year and a further 17 conversions. Capesizes typically haul 150,000 tonne cargoes such as iron ore and coal.
"The freight market is clearly facing downward pressure from the supply growth in this fleet," Langston said.
Other shipping analysts said earlier this week the dry freight market was expected to remain low for up to 12 to 24 months as fleet growth takes its toll. Broker Fearnleys said a major upturn in rates was not expected before the end of 2013. (Reuters)
