Ship-owners are shifting their investment from dry bulk to tankers and containerships, according to Chelsea Wang, consultant from Drewry Maritime Services.
Speaking for the recent 8th Korean Register (KR) technical seminar held in Singapore, Wang highlighted that the dry bulk market is experiencing a lower growth rate, due to the slowdown in two key demands drivers namely in the iron ore and coal trade.
She expects that the world seaborne iron ore for the next five years starting from 2015-2020 to grow at an average rate of 3.5% as compared to the growth rate of 9.2% from 2009-2014 periods. The slower growth rate is associated with dropping demand of China’s iron ore imports which is expected to grow at a rate of 3.9% in the 2015-2020 in contrast to 9.1% rate in 2009-2014.
Similarly, the world seaborne coal trade is predicted to grow at 3.5% rate in 2015-2020 period as compared to the double-digits growth of 17.6% in the 2009-2014.
“Initially, the coal market looks good, and no one expects the demand to drop at 2015, due to the China’s economic slowdown,” said Wang.
Therefore, she believes that for the 2015-2020 period, China’s steam coal imports will drop to the negative region by 5% as compared to the robust import rate of 28.5% in 2009-2014.
“India will come to the rescue (in the coal market), but we expect a slower growth rate in its coal imports,” added Wang.
Imports of steam coal are expected to grow at 7.6% for India over the 2015-2020 period, a slower import rate as compared with 23.7% in the 2009-2014 period.
Meanwhile on the tankers market, earnings have jumped due to the higher trade and increased storage demand since the collapse of oil prices.
“Asia has been the main driver of the oil import growth due rising refining capacity in the region and increasing energy demand,” explained Wang.
Due to the growth, ordering of new vessels have increased and there are more conversion of bulk carriers to tankers, resulting in strong deliveries in 2016-2017. Thus, Wang expects tanker fleets to grow by 3.1% per annum until 2020, with the very large crude carrier (VLCC) fleet growing at 3.6% per annum.