Global dry bulk trade set to increase 9% in 2010
But Maersk Broker says fleet expansion will outpace rise in demand.
INCREASED industrial production will see dry bulk trade rise 9% to 3.7bn tonnes in 2010, after falling 4% last year, according to Maersk Broker.
Iron ore exports were forecast at just over 1bn tonnes, up 12% on last year, while coal was forecast at 735m tonnes, a 3% increase. Minor bulks were at 1.2bn, up 11%.
But despite what the broker says is a significant increase in demand, growth will still be outpaced by an 18% fleet expansion.
Even if fewer newbuilding bulk carriers were delivered from shipyards than expected, ?growth in the dry bulk fleet will reach 15% and thus still widely surpass demand growth?, said Maersk Broker"s quarterly Dry Bulk Market report, released this week. However freight rates would not collapse from this imbalance as the rapid increase in the size of the bulk carrier fleet would worsen port congestion, the report concluded.
Global port congestion hit record levels earlier this month with estimates that 379 bulk carriers, or 8% of the total fleet queuing at ports, especially in Brazil, China and Australia.
In late 2009, queues at Australian east coast coal export ports neared records last seen in mid-2007, with some ships at Newcastle and Dalrymple Bay delayed by over a month, and have only eased slightly in January.
?Not until 2012 are the world"s ports estimated to be able to cope with the increased number of vessels,? the report said.
?One big question mark remains, the congestion in both loading and discharging ports, and provided terminal operators do not significantly improve the efficiency with which they handle vessel operations ? and the past suggests otherwise ? the theoretical expansion of the fleet capacity could prove just that: Theoretical.?
Maersk said firm rates were expected to continue throughout January and increase in February.
Capesize rates on the key Brazil-to-China route fell by as much as half over the six weeks from mid-November and have already started to gain ground.
?Resurgent Chinese demand for coal combined with steel mills stockpiling iron ore ahead of the yearly price negotiations and increased shipments of grain will push up the market for bulk carriers during the first quarter and possibly even further ahead,? the Maersk Broker report added.