The dry bulk freight market is expected make a modest recovery by late this year or the beginning of 2015 on the back of a gradual levelling out of the current tonnage supply and demand imbalance, according to the research director of the shipbroker Braemar Seascope.

Mainly driven by an oversupply of vessels, the freight market has been weak over the last two-three years, Braemar's group research director Peter Malpas said Friday at the 13th Coaltrans conference in the coastal city of Goa.

The weak market has seen owners barely managing to fix vessels at above the operating cost levels of around $5,500-$6,500/day on the Panamax and Supramax vessels.

"The market has been weak for a number of years and yet we saw an extraordinary number of vessels being ordered in 2013," Malpas said.

These orders included 373 new contracts for Supramaxes and 168 Panamaxes, he said, in addition to the approximately 9,000 vessels that are currently handling dry bulk cargoes.

In the first two months of 2013 alone, there were 30 Supramax vessels ordered, all of them eco designed, he added.

One reason for the healthy order books despite the weak market could be attributed to low newbuilding prices, which was very attractive for fleet replacement, Malpas said.

"In 2015 there are going to be another 200 plus ships coming into the market," he said. "It's a little bit difficult to see any significant recovery with that number of ships."

However, a recovery is on the cards, driven mostly by seasonality and the agriculture business, he said.

"Seasonality will drive upticks in the market. These are primarily isolated to agri-bulk harvesting periods like in east coast South America and the US Gulf Coast," he said.

There will also be a gradual return to better supply and demand balances toward the end of the year, with more cargoes expected to emerge in the market to soak up the excess tonnage, Malpas noted.

But he cautioned that rates would not return to the healthy levels seen in previous years.

"There will be a recovery toward the end of the year, but the recovery will be very modest," he said. "There will be no return to the days when Supramaxes were chartered at $40/day and Panamaxes over $60/day."

"Those days have gone and have gone forever," he said.

Malpas also said that India is developing its ports to be able to accommodate Capesize vessels and that the market will see a gradual switch from transporting coal into India from Supramaxes and Panamaxes to the Capesize.

"The growth in new Indian ports will increase the propensity to use larger vessels to benefit from economies of scale," he said.