So far the market downturn has seen 40% of scheduled deliveries delayed or cancelled but there are still some 260 handymax vessels due for delivery this year. The total orderbook is around 900 vessels.

DVB said the delivery situation is a "very tall order" for the market to cope with. The bank is expecting a 13.5% increase in the handymax fleet size this year and 18.4% next year.

"The rate of increase in supply in 2009 and 2010 will put pressure on any significant increase in freight rates. All those caught up in investing at the peak of the market should expect to have a very tight cash flow situation going forward," the bank reported.

Demolition has been slow, with only 12 handymax bulkers scrapped so far this year with an average age of 30 years.

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