Second dry-bulk shipper files for bankruptcy as rates tumble
18/02/2015 05:08
* Worst dry-bulk cargo market since 1980s - ship owner
* Dozens of iron ore and coal carriers idled
* Baltic dry index falls to all-time low
By Keith Wallis and Henning Gloystein
SINGAPORE Feb 18 (Reuters) - A second dry cargo shipper has
filed for bankruptcy following a collapse in freight rates that
has forced many companies to idle vessels used to haul iron ore,
coal and grain rather than hire out the ships at a loss.
Weaker demand from China and an oversupply of ships has led
to the worst industry downturn in 30 years, pushing the Baltic
dry index .BADI - the industry benchmark for freight rates -
to an all-time low.
China's Winland Ocean Shipping Corp WLOL.PK filed for
Chapter 11 bankruptcy protection in the United States on Feb.
12, court documents show, the second banruptcy this month.
"Due to current market conditions, the financial position of
the company and its subsidiaries has deteriorated, leading to
immediate difficulties," the document states, adding that it had
therefore filed for Chapter 11 protection.
Privately owned Danish firm Copenship filed for bankruptcy
earlier in February after losses in the dry bulk market.
ID:nL6N0VE4AE ID:nL5N0VN3Q8
"The combination of lower steel demand in China and the huge
volume of new tonnage coming on line is what is causing panic
and making this the worst bulk market since the mid-1980s," said
Hsu Chih-chien, chairman of Hong Kong and Singapore-listed dry
bulk shipper Courage Marine.
China's imports tumbled 19.9 percent from a year earlier as
its economy grows at its slowest rate in 24
years. ID:nL4N0VI057
The current freight rate for carrying a cargo of coal in a
panamax ship from Indonesia to southern China is about $3,000
per day, compared with more than $6,000 last year. The Baltic
dry index has slumped by nearly two-thirds in the past 15
months. ID:nL4N0VR3YH
Adding to slowing demand is a swelling fleet, with the
number of ordered capesize and panamax carriers for the next
three years equal to 39 percent of the existing fleet, according
to shipping services firm Clarkson. Yet dry-bulk seaborne trade
rose only 4 percent last year.
As a result, dozens of capesize and panamax vessels have
been idle around Singapore, Hong Kong and off South Africa's
coast, Reuters ship tracking data showed.
Dry-bulkers are not the only shippers in trouble. Over 10
percent of the global liquefied natural gas (LNG) tanker fleet
is currently idled after Asian LNG prices fell almost two-thirds
since February 2014. ID:nL5N0VM06U
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GRAPHIC-Freight rates crash: http://link.reuters.com/zuv93w
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(Additional reporting by Jonathan Saul in London; Editing by
Richard Pullin)
((keith.wallis@thomsonreuters.com)(+65 6870 3803)(Reuters
Messaging:keith.wallis.thomsonreuters.com@reuters.net))
Keywords: SHIPPING DRYBULK/BANKRUPTCY