Bulk carrier demolitions hit an all-time high during the first quarter of 2016, both on an absolute basis and as a percentage of the live fleet, says new research from Deutsche Bank.

The bank estimates that 145 bulk carriers were scrapped during the first three months of this year, totaling 12m tons or around 1.5% of the world's bulker fleet capacity.

Deutsche Bank said that the figures underscore "both the plight of the market as well as the underlying positive factors that will drive a supply-led recovery".

Historic levels of capesize and panamax bulk carriers have also been scrapped over the past year to date, with some 2.1% and 1.8% of the respective fleets sold for demolition. "These levels of scrappage have been met with little-to-no new ordering, which is positive for prospective supply growth," said the bank .

It's a little too soon for optimism, however, as total bulker fleet capacity is still up by 0.4% (equivalent to net growth of 30 ships or 2.9m tons) since 2016 began, owing to 175 deliveries of new bulk carriers.

The bank expects dry bulk capacity to rise by 0.8% by the end of 2016 and dip by just 0.1% in 2017. Historic levels of scrapping and non-deliveries are still being offset by the large orderbook, which is dominated by 2016 deliveries, it said.

"The implication is that any supply-led recovery will take time and be followed by multi-year period of supply contraction, implying a more pronounced recovery is still several years away (i.e. 2019)," noted the bank.

"We do, however, believe recent levels of scrapping – if sustained – should be enough to drive a more rational market in 2017, with spot rates at or slightly above OPEX levels."

The research says that timecharter rates will come under further pressure in 2016, which will continue to cause asset values to decline. One-year timecharter rates are currently around double spot rates, compared with a 30% average premium since 2010 began, which the bank says shows potential for further declines.

London-based shipbroker Alibra Shipping estimates one-year timecharter rates for capesizes at US$5,500 per day – around 60% higher than the Baltic Capesize Index's TCA spot rate, which was assessed at US$2,151 per day on Tuesday.