Saturday, March 07, 2009
Saturday, 07 March 2009
A recent Chinese investment bank report paints a grim outlook for dry bulk shipping, suggesting the downturn will last three years through end 2011. China International Capital Corporation (CICC) has cut its year-on year-growth forecast for 2009 global dry bulk shipments from 2.9% to -3.2% on the back of slumping steel demand. For the coming three years CICC expects the Baltic Dry Index to average 1,000 to 2,000 points. In 2009 shipping capacity growth will rise to 6.7% from 6.4% in 2008, CICC stated, while shipping demand growth is projected to plunge to -3.2% from 5.2% in 2008.
2010 shipping demand growth is expected to rebound to 4.5% from the forecasted -3.2% in 2009, but shipping capacity growth could rise to 9.2% from the expected 6.7% in 2009. CICC's shipping capacity growth expectation is assuming that 40% of shipbuilding orders will be cancelled. 'Even based on the assumption, the expected shipping capacity growth is still well above demand growth. So capacity oversupply for the global dry bulk shipping market could be very significant in 2009 and 2010,' the bank warned.
Established in 1995 as a strategic partnership among prestigious Chinese and international financial institutions and corporations, CICC is the first joint venture investment bank in China.
Source: SeatradeAsia Online