The shipping industry is on course for consolidation as it moves off three-decade lows, the president of drybulk shipper Genco said on Wednesday.
Anticipating a cyclical recovery to kick in at the end of this year, president John Wobensmith told CNBC's Squawk Box that a pullback in shipping supply is the main driver of the benchmark Baltic Dry Index's recovery of more than 7 percent this year.
The index, which assesses the price of moving the major raw materials by sea, hit its lowest level ever of $290 during 2016 before resuming a bumpy journey higher towards its current price of just about $1,000.
"Last year we probably saw the low and it was a 30-year low in terms of freight rates and asset values and now we're starting to see just the very beginning of a recovery," Wobensmith said.
"There were just too many ships that were built and delivered and we've seen a real slowdown in the number of ships that have been coming on to the water," he explained.
"The order book on ships is at its lowest point since 2002, it's only 9 percent of the existing fleet right now, and that's been helpful," Wobensmith added, agreeing that the slowdown has primarily been driven by a slackening in supply from Asia, particularly from industry players in countries such as South Korea and China.