Monday, January 25, 2010

Cosco President Predicts Jump In Bulk Freight Rates

Baltic Dry Index To Be Better Than Last Year – Zhang
Shipping News Feature

CHINA – China Cosco’s President, Mr. Zhang Liang, has predicted that due to increased demand for bulk commodities in China the Baltic Dry Index, which charts global commodity shipping rates, will see an increase of over 50% this year in comparison to 2009.

Head of the world’s largest operator of bulk carriers, Mr.Zhang told reporters in Hong Kong today that he believed that due to the Chinese government’s $586 billion stimulus package the Baltic Dry Index would easily break last year’s average of 2,600 points, with an average of between 3-and-4,000 points for 2010. Iron ore and coal will continue to be the principal commodities that China requires to fuel its continued economic expansion.

However, he did warn that “…the bulk market is going to be volatile," adding that the sector was “…still facing huge pressure this year because of oversupply of new ships.”

Mr. Zhang further stated that Cosco would seek to control this situation by delaying the delivery of new vessels on order so as to reduce capacity and maintain rates.