The dry bulk shipping market needs to restructure before making a real recovery in 2018.

Speaking to a media briefing in Singapore on Wednsdeay, James a’Beckett, head of dry cargo broking for Braemar ACM Shipbroking, said: “The market needs to restructure itself and you are going to see that with operators. I do think that the Japanese investment model of investor goes to a bank, borrows money, then builds a ship and puts that on long term charter to one of the major operators – that model needs to be reviewed.”

He said that it would take until 2018 for this to play out.

This would include vessels built in the boom, that are highly inefficient compared to ships built recently, which as a result have been rendered largely redundant.

The control of vessels will return to the head owners and also the banks.

“We’re going to see vessel control going back to the head owners and back to the banks. Obviously there’s a huge amount debt associated with that and the banks have kicked that down the road and that’s the critical thing, and that’s got to change,” a’Beckett said.

Denis Petrpoulos, president of Braemar Group Asia, noted that first rates have to return to a level where they cover operating costs, and capital expenditure. “It is hard for banks to scream for their money when shipowners are barely paying their crew, they know their being over demanding would comprise safety,” he said.

While markets have bounced back in the last few weeks, in particular capesizes, rates remain at extremely low levels in historical terms.

“The underlying thing is the dry cargo fleet is incredibly modern and it’s more than we need and that’s not going to change for a long time,” a’Beckett said.