Dry bulk freight could see oversupply problems linger through 2014 if shipowners do not cancel more newbuilding orders and send older vessels to scrap yards, an official with shipbroker SSY said.

Despite surging commodity prices, the Baltic Exchange's main dry freight index tumbled to a two-year low this month as a flood of new vessels exacerbated an already oversupplied market.
The global dry bulk fleet, which transports mainly iron ore, coal and grains, has already expanded by 12 million deadweight tonnes in the first six weeks of this year, said Guillaume Baron, project manager for dry cargo chartering at SSY in Hong Kong.

'We are in unchartered territory and we are going to be there for awhile,' Baron said at a coal conference.

'I cannot see (the freight crisis) being as short as nine months and everything going back to normal. Two to three years is more reasonable.'

Shipowners went on a buying spree before the economic downturn two years ago and those vessels are only now coming to the market.

The global dry bulk fleet could expand between 11 and 13 per cent to nearly 600 million deadweight tonnes, even with scrapping and delays in new deliveries taken into account, analysts said.

That would far outpace demand of around 8 per cent.