SINGAPORE (Dow Jones)–The Baltic Dry Index, the bellwether gauge of rates for ship dry commodities including grains, iron ore and coal, will likely find support for the rest of the year from Chinese demand and an expected increase in ship scrapping, a senior shipping executive said Wednesday.
The index plunged to a 26-year low of 647 points in February as new ships were put into operation. Bad weather in Brazil and Australia as well as the Chinese New Year also hurt global trade, Precious Shipping PCL (PSL.TH) Managing Director Khalid Moinuddin Hashim said.
The gauge has rebounded since then, closing at 1,152 points Tuesday on the London-based Baltic Exchange, reflecting increased confidence in demand from China, he said, tipping the metric to stay in the 800-1,200 range through the end of the year.
China’s iron ore imports in the first quarter of this year totaled 187 million metric tons, up 6% compared with a year earlier, while coal imports totaled 50.3 million tons , up 58%.
This growth has taken place against the backdrop of a slowing Chinese economy, a very low BDI average and an official forecast of an annual GDP growth of just 7.5% for 2012, well below the 9.2% growth seen in 2011, Hashim noted.
Things could be looking up datawise, Hashim added, referring to HSBC‘s monthly manufacturing Purchasing Managers’ Index, which rose to 49.3 in April compared with 48.3 in March. While the reading, issued Wednesday, is in contractionary territory, the uptick may signal a soft landing and continuing demand for raw materials in the world’s second-largest economy.
The slippage rate–the number of new ships delayed at shipyards or deferred by owners–is likely to reach 50% this year compared with 28% in 2011, supporting freight rates, Hashim said. An increase in ship tonnage slated to be scrapped, to about 50 million deadweight tons in 2012, will also help freight rates, as it will partially offset new builds, meaning that the dry bulk fleet may grow by just 3.3% this year compared with earlier expectations of 10% growth, he added.
Precious Shipping, Thailand’s leading dry-bulk shipper, owns 30 vessels and aims to double its fleet by 2014, Hashim said.
The cargo ship Vezhen did damage a subsea cable linking Sweden and Latvia last month but it was an accident, not sabotage, a Swedish prosecutor said on Monday, adding that the Maltese-flagged vessel had been released.
WASHINGTON, Jan 30 (Reuters) – When Marco Rubio arrives in Latin America this weekend on his first foreign trip as Donald Trump’s secretary of state, he’ll find a region reeling from the new administration’s...
US President Donald Trump has raised the stakes for a meeting of an OPEC+ ministerial panel next month, with his call for the group to lower oil prices.
January 24, 2025
Total Views: 1330
Sign Up Now for gCaptain Daily
We’ve got your daily industry news related to the global maritime and offshore industries.
JOIN OUR CREW
Maritime and offshore news trusted by our 109,002 members delivered daily straight to your inbox.
Your Gateway to the Maritime World!
Essential news coupled with the finest maritime content sourced from across the globe.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.