Bulk carriers return to turbulent seas
The Baltic Dry Index plummeted 94 per cent over six heart-stopping months in 2008 and the world seemed irretrievably bleak for global shipping. The industry may have rebounded of late, but the message from analysts is clear: treat the recovery with caution. At one level, shipping rates are behaving as the market might expect, reflecting the revival in global trade and China"s appetite for commodities. Freight rates have risen, although they are still only a fraction of their all-time high two years ago. Containership rates have rebounded on Asia-Europe routes.
Furthermore, a drought in China means that it may have to import an extra 20 million tonnes of coal between April and June, causing dry-bulk rates ? those of single commodities carried in bulk, as opposed to those carried in separate containers ? to surge.
Meanwhile, Cosco, the giant Chinese shipping company, said last week that the supply of new containers, cut last year as demand slumped, was not enough to meet the needs of rebounding trade.
But while some of the worst problems of the post-Lehman chaos have been resolved, others remain, not least a chronic oversupply of vessels. The financial crisis interrupted what remains the biggest spree of shipbuilding in history, with 1,487 vessels scheduled for delivery this year. Only last week, Mitsui O.S.K. Lines, of Japan, with an eye to the expanding markets of China and India, said that it would spend £10 billion expanding its fleet by 17 per cent over the next two years.
Some industry figures believe that more than 40 per cent of new dry-bulk carriers scheduled for delivery this year may be cancelled or delayed, but the new vessels finished last month are joining a worldwide fleet that remains in excess of present needs.