Report: container, bulk shipping markets to remain strong in 2005
Global container shipping, dry bulk and tanker markets will remain strong during 2005 with a continued tight supply and demand situation in all major sectors, according to a report published by the Korea Maritime Institute.
The institute’s “World Shipping Market Forecast 2005” predicts that the container shipping market will remain bullish next year, following continuous growth of China’s trade, and port congestion.
It also expects the dry bulk and tanker markets to maintain “brisk market conditions” in 2005, when compared to previous years.
The Korea Maritime Institute said its forecasts are based on statistics released in the second half of 2004 from Korean and international research organizations, and on a survey about market condition expectations from 17 shipping companies and agencies.
In the global container market, the Korea Maritime Institute said world container cargo demand will rise by 11.5 percent in 2005 to 112.5 million TEUs, while the world container fleet will grow 14 percent to 9.17 million TEUs.
“Though fleet growth rate is higher than cargo volume increase, overall demand will still exceed supply in major trunk routes, which will result in (a) continuous bullish tendency in freight rates,” it commented.
In the transpacific container market, the Korean body predicts cargo volume in 2005 will increase 12.5 percent to about 17.9 million TEUs, while fleet capacity will grow 11 percent to 29.4 million TEUs. Freight rates on the transpacific route are expected to rise in 2005.
On the Asia/Europe route, cargo volume will increase 14.8 percent to 11.3 million TEUs, while container fleet tonnage is expected to increase 11 percent to 14.3 million TEUs, according to the forecast. Westbound freight rates from Asia to Europe are predicted to rise.
“As far as (the) intra-Asia routes are concerned, market conditions will differ on each trade route,” the Korea Maritime Institute said. The freight rates in the Korea/China and Korea/Japan routes are expected to stay at the same level as in the second half of 2004. But rates on the Southeast Asia route will continue to rise, based on strong demand and close cooperation among carriers, it added.
In the dry bulk sector, the market will remain bullish in 2005, the report predicts. Freight rates will continuously rise in the first half, but will start slowing down in the second half due to a tonnage increase and lower growth rates in cargo volumes. The total volume of five major dry bulk cargos — coal, iron ore, grain, bauxite/alumina and phosphate rock — will grow around 4 percent, and supply is expected to increase 3.5 percent when measured in deadweight tonnage.