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China
Cosco Holdings Co., the world’s largest operator
of dry-bulk vessels, said the Baltic Dry Index
of commodity shipping rates will jump as much as
54 percent this year from 2009’s levels, boosted
by Chinese demand. The index will average
between 3,000 points and 4,000 points this year,
China Cosco president Zhang Liang told reporters
today in Hong Kong. The Baltic Dry Index
averaged 2,617 points last year, according to
data compiled by Bloomberg.
“This year will be better than last year,” Zhang
said. Still, “the bulk market is going to be
volatile.”
The gauge rebounded in 2009 after falling a
record 92 percent through 2008. China, the
biggest user of iron ore, imported a record
amount of the steelmaking raw material last year
as a $586 billion government stimulus plan and
record lending helped revive the country’s
economy.
“Overcapacity is going to be the main concern
for the shipping market in 2010,” said Johnson
Leung, a Hong Kong-based analyst at Tufton
Oceanic Ltd., the world’s largest shipping
hedge-fund group. Global dry bulk’s capesize
fleet, the most important segment, is estimated
to grow 25 percent, Leung said.
China Cosco will avoid “substantial growth” in
capacity this year by delaying vessel
deliveries, Zhang said. “We are still facing
huge pressure this year because of oversupply of
new ships, iron-ore talks and fuel costs,” he
added.
China Cosco rose 3.6 percent to HK$10.88 today
in Hong Kong. The stock has risen 136 percent in
the past year.
Mainland parent China Ocean Shipping Group’s
container unit, Cosco Container Lines Ltd.,
successfully raised rates this month on
different routes, including transpacific, Asia
Europe, Oceania routes. More than 90 percent of
customers accepted the new rates, which will
continue to rise this year, Zhang said.
Source: Bloomberg
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