Dry bulk shipping capacity may reach a surplus in the second half of 2009, pushing charter rates lower, said the president of Cargill Ocean Transportation, a unit of Cargill Inc.
Shipyards may deliver 56 million tonnes of new capacity this year to transport coal, grains and ore, Gert-Jan van den Akker said in Singapore yesterday. Yards have new orders of 200 million tonnes of dry bulk capacity, evenly split between 2010 and 2011.
'We have had a glut of ordering,' Mr Van den Akker said at the Global Trader Summit. 'We don't know how many will come through, but if it's a 100 million tonnes in 2010, it's going to be a bloodbath after that,' he said.
Dry-bulk shipping lines need an 'unprecedented' surge in Chinese iron-ore imports to fully use their expanding fleets, according to Credit Suisse Group AG.
The Baltic Dry Index, a measure of commodity-shipping rates, fell 76 per cent from a record last year. The measure more than tripled to a record this year to 2,942 points on May 26 after China's stimulus helped revive demand.
Demand for ores and grains must typically rise six fold, or about 300 million tonnes, to match the addition in new dry bulk capacity this year, Mr Van den Aker said, based on ships making an average of six trips a year. China was unlikely to increase consumption by that amount, he added. The new capacity may account for about 15 per cent of the existing dry bulk fleet, according to Bloomberg data.
The global dry-bulk fleet will likely increase 6.9 per cent this year, Credit Suisse said in a report this month. To utilise the expanded fleet, full-year Chinese iron-ore imports would need to rise 63 per cent from 2008, the bank said.
Spot charter rates for dry bulk voyages have collapsed by more than 90 per cent while asset prices have fallen by only 60 per cent, Vivek Agarwal, the managing director at Visa Resources Ltd, said at the conference.
'Someone who buys asset prices that dropped 60 per cent is taking a big gamble,' Mr Van den Akker said.
Mitsui OSK Lines Ltd, the world's largest merchant fleet operator, may bid for an overseas bulk- shipping line as plunging demand and the global recession send company valuations tumbling, Kenichi Yonetani, a senior managing executive officer at the company, said in an interview in Tokyo on May 25.
Pacific Basin Shipping Ltd, Hong Kong's largest operator of commodity vessels, has also said it may bid for bulk-shipping lines as plunging rates press weaker players.
Shipyards may deliver 56 million tonnes of new capacity this year to transport coal, grains and ore, Gert-Jan van den Akker said in Singapore yesterday. Yards have new orders of 200 million tonnes of dry bulk capacity, evenly split between 2010 and 2011.
'We have had a glut of ordering,' Mr Van den Akker said at the Global Trader Summit. 'We don't know how many will come through, but if it's a 100 million tonnes in 2010, it's going to be a bloodbath after that,' he said.
Dry-bulk shipping lines need an 'unprecedented' surge in Chinese iron-ore imports to fully use their expanding fleets, according to Credit Suisse Group AG.
The Baltic Dry Index, a measure of commodity-shipping rates, fell 76 per cent from a record last year. The measure more than tripled to a record this year to 2,942 points on May 26 after China's stimulus helped revive demand.
Demand for ores and grains must typically rise six fold, or about 300 million tonnes, to match the addition in new dry bulk capacity this year, Mr Van den Aker said, based on ships making an average of six trips a year. China was unlikely to increase consumption by that amount, he added. The new capacity may account for about 15 per cent of the existing dry bulk fleet, according to Bloomberg data.
The global dry-bulk fleet will likely increase 6.9 per cent this year, Credit Suisse said in a report this month. To utilise the expanded fleet, full-year Chinese iron-ore imports would need to rise 63 per cent from 2008, the bank said.
Spot charter rates for dry bulk voyages have collapsed by more than 90 per cent while asset prices have fallen by only 60 per cent, Vivek Agarwal, the managing director at Visa Resources Ltd, said at the conference.
'Someone who buys asset prices that dropped 60 per cent is taking a big gamble,' Mr Van den Akker said.
Mitsui OSK Lines Ltd, the world's largest merchant fleet operator, may bid for an overseas bulk- shipping line as plunging demand and the global recession send company valuations tumbling, Kenichi Yonetani, a senior managing executive officer at the company, said in an interview in Tokyo on May 25.
Pacific Basin Shipping Ltd, Hong Kong's largest operator of commodity vessels, has also said it may bid for bulk-shipping lines as plunging rates press weaker players.