Asset values in the dry bulk market are under enormous pressure and, according to sources in the market, plummeted no less than 25 percent in the fourth quarter 2015. On Wednesday this development forced carrier Norden to become one of the first major dry bulk players to announce a USD 180 million impairment on the company's fleet of bulk vessels.
The explanation is simple. The extremely low market and the extremely low rates are eroding the ships' value, note several of ShippingWatch's sources. And it is far from certain that these values have hit rock bottom. The dry bulk rates continue to slide as the Baltic Dry Index dropped to a new all-time low of 358 points this week. Furthermore, ships are being sold as scrap earlier, which reduces their financial lifespan. All of these factors impact asset values.
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