According to Mr Zhoubin general manager of Shanghai Changhang Shipping Co Ltd "Shipping industry has been confronted with unprecedented difficulty and challenges under the worldwide economy crisis, which results in waning demand. China iron ore imports will become one of the biggest drivers for bulk freight demand."

He said that the container transport market will continue to slide owing to the serious overcapacity.

Influenced by the economy crisis, Baltic Dry Index which gauges the cost of shipping resources including iron ore, cement, grain, coal and fertilizer has fallen by 22% since last October. The index for the European route has even dropped by 44%. Clarkson forecasted that freight capacity would soar by 11.8% in 2009.

BDI steadily dropped to 663 on December 5th 2008 from its historical top of 11793 on May 20, 2008. And the index fell again from its recent peak of 4291 on June 3rd this year to 2423 on September 1st. BDI averaged some 7343 in 2008, 1562 in Q1 2009 and 2714 in Q2 2009.

As per Abare, China iron ore imports will go up by 28% in 2009 along with its thirst for steel-making raw materials and by another 12% in 2010. Abare raised its formal expectation on resource hungry China total iron ore imports in 2009 by 7.8% to 568 million tons and the imports in 2010 by 20.4% to 637 million tons from the original one of 529 million tonnes.

Mr Zhou remained cautious on the outlook. World Steel Association's latest forecasts showed that the global apparent demand for steel in 2009 would at least sink by 14.9% to 1018.6 million tons. The demand would gradually become stable during the second half of 2009. And a moderate recovery in steel market would be seen in 2010.

While at the same time, Clarkson foresaw in this Apr that bulk freight capacity will climb up by over 60 million tons or 10.7% to 460 million tons this year and by some 100 million tons or 18.3% to 548 million tons next year. In other words, the global freight market will be continuously plagued by the serious overcapacity as well as shrinking demand in the following several years.

Mr Zhou also added that though there were some improvements in both domestic and international economy during a certain period, it was still far away from the so-call recovery. The negative impacts on international freight market, possibly intensified, are likely to be long term with more baptism in the future.

(Sourced from MySteel.net)
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