Dry-bulk shipping rates may 'stay firm' until at least 2009, after rising to a peak in 2008, on a shortfall of vessels that carry iron ore, coal and other commodities, South Korea's STX Pan Ocean Co said.
China's shift to a net coal importer will mean countries in Asia will have to look farther for fuel, tying up vessels longer.
The supply of ships will fall short of demand until 2010 as ageing vessels will be scrapped, Lee Jong Chul, president at STX Pan Ocean said in an e-mailed response to Bloomberg queries. 'We predict a near-term peak of the Baltic Dry Index will be reached in the first quarter of 2008.' The Baltic Dry Index, an overall measure of the cost of transporting commodities, rose 25 points, or 0.3 per cent to 9,922 points on Wednesday ending 10 days of decline, according to the London-based Baltic Exchange. The Baltic Dry Index fell 10 per cent since it reached a record 11,039 on Nov 13.
'We do not assume the correction that took place during the past couple of weeks as the end of the dry bulk super cycle,' Mr Lee said in his response sent on Monday.
STX Pan Ocean is South Korea's largest carrier of commodities.
New Chinese shipyards may experience delays in delivering vessels due to lack of shipbuilding equipment, engineers and the rise in steel plate prices, Mr Lee said. China's shift to a net coal importer will mean countries in Asia will have to look farther for fuel, tying up vessels longer and squeezing supply.
'On the demand side, we see a continuous gain in Chinese raw materials consumption,' Mr Lee said. 'In addition, we anticipate India to become the next China based on its rapid growth shown during the past few years.'
Port bottlenecks in India will be even worse than in China due to its lack of infrastructure, Mr Lee said. Many of India's ports are unable to handle capesize and panamax vessels, among the largest types of dry-bulk carriers.
A capesize can move 175,000 tonnes of dry-bulk cargo while a panamax can transport 70,000 tonnes.
Mr Lee estimated that 45 single-hull very large crude carriers, or VLCCs, will be converted into very large ore carriers, or VLOCs.
The conversions are unlikely to increase sharply as not many shipyards are open to it and many iron ore-exporting ports are unable to handle bulk carriers which can carry more than 280,000 tonnes, Mr Lee said.
STX Pan Ocean plans to expand its fleet to about 550 by the end of 2010. The company operated a fleet of 348 vessels as of June 30, including 308 bulk carriers, it said on Sept 10.
China's shift to a net coal importer will mean countries in Asia will have to look farther for fuel, tying up vessels longer.
The supply of ships will fall short of demand until 2010 as ageing vessels will be scrapped, Lee Jong Chul, president at STX Pan Ocean said in an e-mailed response to Bloomberg queries. 'We predict a near-term peak of the Baltic Dry Index will be reached in the first quarter of 2008.' The Baltic Dry Index, an overall measure of the cost of transporting commodities, rose 25 points, or 0.3 per cent to 9,922 points on Wednesday ending 10 days of decline, according to the London-based Baltic Exchange. The Baltic Dry Index fell 10 per cent since it reached a record 11,039 on Nov 13.
'We do not assume the correction that took place during the past couple of weeks as the end of the dry bulk super cycle,' Mr Lee said in his response sent on Monday.
STX Pan Ocean is South Korea's largest carrier of commodities.
New Chinese shipyards may experience delays in delivering vessels due to lack of shipbuilding equipment, engineers and the rise in steel plate prices, Mr Lee said. China's shift to a net coal importer will mean countries in Asia will have to look farther for fuel, tying up vessels longer and squeezing supply.
'On the demand side, we see a continuous gain in Chinese raw materials consumption,' Mr Lee said. 'In addition, we anticipate India to become the next China based on its rapid growth shown during the past few years.'
Port bottlenecks in India will be even worse than in China due to its lack of infrastructure, Mr Lee said. Many of India's ports are unable to handle capesize and panamax vessels, among the largest types of dry-bulk carriers.
A capesize can move 175,000 tonnes of dry-bulk cargo while a panamax can transport 70,000 tonnes.
Mr Lee estimated that 45 single-hull very large crude carriers, or VLCCs, will be converted into very large ore carriers, or VLOCs.
The conversions are unlikely to increase sharply as not many shipyards are open to it and many iron ore-exporting ports are unable to handle bulk carriers which can carry more than 280,000 tonnes, Mr Lee said.
STX Pan Ocean plans to expand its fleet to about 550 by the end of 2010. The company operated a fleet of 348 vessels as of June 30, including 308 bulk carriers, it said on Sept 10.