Third dry-bulk shipper files for bankruptcy this month as rates tumble
23/02/2015 03:56
* S.Korea's Daebo International Shipping in court
receivership
* Worst dry-bulk cargo market since 1980s - ship owner
* Baltic dry index falls to all-time low
By Meeyoung Cho and Henning Gloystein
SEOUL/SINGAPORE Feb 23 (Reuters) - A third dry cargo shipper
has filed for bankruptcy this month following a collapse in
freight rates to historic lows in what shippers call the worst
market conditions since the 1980s.
South Korea's Daebo International Shipping Co Ltd filed a
court receivership, a form of corporate bankruptcy, on Feb. 11,
mainly due to poor dry bulk market conditions, a company
official said on Monday. It is the third known bulk shipper
bankruptcy this month.
Weaker demand from China and an oversupply of ships has led
to the industry downturn, pushing the Baltic dry index .BADI -
the industry benchmark for freight rates - to an all-time low
this month. The index has slumped by nearly two-thirds in the
past 15 months. ID:nL4N0VR3YH
"The dry bulk market is in a really bad shape, which has hit
us hard," the Daebo International official told Reuters by
phone. He declined to be identified as he was not authorized to
speak to media. "We did our best but we cannot help it."
He said the court ordered Daebo's assets to be frozen on
Feb. 13.
Daebo International mainly provides panamax-sized dry bulk
shipping services such as iron ore, coal, grains and steel
products, according to its website.
South Korea is the latest major shipping country to be hit
by a bankruptcy in the sector.
China's Winland Ocean Shipping Corp WLOL.PK filed for
Chapter 11 bankruptcy protection in the United States on Feb.
12, court documents show, also citing difficult market
conditions.
In Denmark, privately owned 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," Hsu
Chih-chien, chairman of Hong Kong and Singapore-listed dry bulk
shipper Courage Marine said this month. ID:nL4N0VM41R
China's imports tumbled 19.9 percent in January from a year
earlier as its economy grows at its slowest rate in 24
years. ID:nL4N0VI057
Dry-bulkers are not the only shippers in trouble. Over 10
percent of the global liquefied natural gas (LNG) tanker fleet
is currently estimated to be idled after Asian LNG prices fell
almost two-thirds since February 2014. ID:nL5N0VM06U
(Additional reporting by Jonathan Saul in LONDON; Editing by
Richard Pullin)
((henning.gloystein@thomsonreuters.com)(+65 6870 3263)(Reuters
Messaging: henning.gloystein.thomsonreuters.com@reuters.net))
Keywords: SHIPPING DRYBULK/BANKRUPTCY