AXIA Capital Markets has jacked up its dry cargo rate forecasts amid the belief demand will continue to outpace supply growth in the coming years.

Analyst Clinton Webb raised his forecasts for capesize, panamax and supramax bulkers for 2018 and suggested improved rates awaited shipowners in each of the sectors in 2019.

“We believe that last year was just the first part of a drybulk recovery,” he said in a report.

Dry bulk shares have been flat this year after a strong 2017 with high newbuilding deliveries in the first quarter of 2018 placing pressure on rates, which are traditionally weaker seasonally in part due to Chinese New Year.

Webb says rates typically step up sequentially each quarter during the year and the pattern is expected to be the same in 2018.

AXIA has raised its dry cargo rate forecasts by 20% on average for 2018.

Capesize bulkers are now forecast to earn $17,500 per day this year, ahead of the $13,000 per day average in the year to date.

Panamax and supramax forecasts have been tuned up to $13,000 and $12,000 per day respectively.

Webb expects the upward trend to continue in 2019.

“With the current orderbook-to-fleet ratio at 9.6%, still at historically low levels, we believe that the dry bulk market has clear runway into 2020,” he said.

He has introduced a capesize forecast of $23,000 per day for next year, with panamax and supramax estimates at $16,000 and $15,500 per day.

Webb has buy ratings on Golden Ocean, Scorpio Bulkers and Star Bulk, with hold tags on Eagle Bulk and Genco.

 201620172018 (AXIA Forecast)2019 (AXIA Forecast)
Capesize$7,403 per day$15,128 per day$17,500 per day$23,000 per day
Panamax$5,573 per day$9,766 per day$13,000 per day$16,000 per day
Supramax$6,262 per day$9,168 per day$12,500 per day$15,500 per day