A growing orderbook
Recent developments in the Dry Bulk Carrier market have shifted the spotlight onto the orderbook-to-existing-fleet ratio, which has climbed noticeably since early 2023. Although overall capacity still grows at a more measured pace than in some past cycles, this rising ratio hints at renewed confidence among owners, supported by a mix of improved demand prospects, competitive newbuilding prices, and forward-looking regulatory considerations. On the demand side, industrial output in Asia has held up stronger than many anticipated, bolstered by continued infrastructure spending in key markets and stable commodity flows over longer tonne-mile routes. This has given many shipowners the impetus to order modern, fuel-efficient tonnage sooner rather than later, especially with yard capacity increasingly stretched by robust ordering in other shipping segments. Meanwhile, new environmental regulations, such as EEXI and CII, are prompting many to secure next-generation vessels — some exploring dual-fuel LNG or alternative fuels like ammonia and methanol — to future-proof their fleets against tightening decarbonization targets. Currently, 11% of Bulk Carriers on order have some form of alternative propulsion.
Incoming oversupply?
One might ask whether a rising orderbook ratio prefaces a return to oversupply. Historically, ordering surges have sometimes led to capacity gluts, weakening freight rates. However, there are mitigating factors today, including an aging fleet that may face higher scrapping volumes once new regulations become more stringent. Yard slots, while available, are not as abundant as a decade ago, limiting how quickly fresh capacity can actually hit the water. Yet it would be remiss not to highlight the potential risks: if a global economic slowdown were to dent commodity demand, or if stricter environmental rules ratchet up operating costs faster than expected, the market could face renewed headwinds. The real test will come once these newbuilds begin delivering. If demand growth can absorb the incoming vessels, the bulk market may enjoy a more balanced and sustainable expansion phase in the years ahead.
Looking at the Standard Capesize segment (160K–220K MT of deadweight), we see how sensitive this size class can be to shifts in commodity markets. In the aftermath of the 2015–2016 commodity price downturn, the orderbook-to-fleet ratio fell to a historically low 7% by the end of 2017. As sentiment improved, that same ratio surged to about 15% by mid-2019, only to retreat to 7% again in early 2023. More recently, in January 2025, it has rebound to around 10.5%. Over this same period, existing Capesize capacity has expanded from 243m MT of deadweight to around 304m MT of deadweight - a 25% increase that reflects both fleet renewal and investor optimism. Meanwhile, the Capesize orderbook, which dipped below 22m MT of total deadweight capacity in early 2023, now stands at roughly 30m MT. Much of this renewed appetite stems from rebounding Iron Ore demand in Asia, where infrastructure and energy-related projects have pushed tonne-mile requirements higher. At the same time, the introduction of stricter emissions standards has caused some owners to replace older tonnage with more efficient and regulation-compliant designs.
In the Panamax segment (68K–85K MT of deadweight), flexibility and broad cargo coverage continue to attract owners. Current data suggest that existing Panamax capacity stands at around 216m MT of deadweight, while the orderbook has surged from under 12m MT in deadweight capacity in 2021 to over 31m MT today. With Panamaxes able to carry everything from coal to grains, owners are betting on steady trade flows and the versatility these mid-sized ships provide. As with Capesizes, however, there is an underlying tension between the race to secure greener vessels and the possibility that macroeconomic or policy headwinds—such as a sharp decline in commodity prices or additional environmental requirements—could weigh on the market’s momentum. Higher capital and operational costs tied to new emission standards are already shaping decisions about when to order and how to finance more fuel-efficient tonnage.
What lies ahead
In sum, the Bulk Carrier market’s orderbook-to-fleet ratio has risen across multiple size classes, including Capesize and Panamax, as owners respond both to near-term trade prospects and longer-term decarbonization targets. While enthusiasm for new tonnage signals confidence in future freight demand and the industry’s ability to adapt to environmental regulations, it also raises questions about capacity management if global growth falters or compliance costs balloon. Navigating these crosscurrents—balancing newbuild ambitions with operational realities—will be key to sustaining a healthy bulk market in the years ahead.
AXSInsights provides its users with the ability and up to two decades of historical data to observe and track real-time trends for any fleet Dry Bulk fleet segment as they occur.
