Under great supports from SMU and Hongkou District People’s Government, SISI organized experts and scholars for close researches on changes and development trends of the international shipping market. As a New Year's gift dedicated to the shipping industry, SISI held a press conference on January 20, 2010 to release the Shipping Market Analysis Report (2009 Review and 2010 Outlook) in four parts, focusing respectively on 2009 review and 2010 outlook of international dry bulk shipping market, international container liner shipping market, international tanker shipping market and Chinese coastal dry bulk shipping market.

According to the Report, along with the gradual improvement in global economy and trade, the world’s major economies have gradually climbed back with signs of recovery in relative trade volume since the second quarter of 2009. Despite a slowdown, emerging economies continue to serve as the powerhouse for global economic and trade development.

Has the world shipping market really bottomed out? What are the trends of major shipping markets such as the international container, international dry bulk, international tanker, and Chinese coastal dry bulk shipping in 2010? How about their respective situations? How can shipping enterprises respond to market changes and other issues? The Shipping Market Analysis Report (2009 Review and 2010 Outlook) has provided reference answers and views for industry professionals. According to the Report, the overall world economy and trade will experience an upturn in 2010, but still stuck with uncertainties; the recovery of the shipping market will relatively lag behind. In 2010, despite an expected slight increase in trade volume on the shipping market, the overcapacity will remain serious, and the relatively concentrated delivery of new capacities will exert a great impact on the market. Due to dynamic changes in delivery, storage, dismantlement and adjustment of shipping capacities, the shipping enterprises may keep strolling in the vicinity of the breakeven point, with short-term prosperity shown in some local markets.

As anticipated in the Report, the global shipping trade volume of mass bulks will reach about 3.091 billion tons in 2010, an increase of 5.7% YoY. To be specific, there will be a 9.5% increase in trade volume of iron ores, increasing demands for coals, and a slightly declining trade volume of cereals. A stable performance will be unveiled for minor bulks. Chinese Government will continue to implement the policy of "expanding domestic demands and promoting economic growth". The introduction of a series of macro-control policies will lead to a rapid growth in investment and consumption demands, featuring slower shrinkage in import/export growth, rapid rebound in industrial production, and promising trend of the overall market. In 2010, the demand for coals will continue rising, that for iron ores remain strong, and that for food keep relatively stable. In connection with the container market, it is estimated that the westbound cargo volume of Pacific routes will record 6.08 million TEUs, a YoY increase of 2.9%; the eastbound cargo volume will record 11.83 million TEUs, a YoY increase of 4%. The volume ratio of eastbound to westbound will be further reduced. There will be relatively optimistic trends of Asian and European markets, with an expected 4% growth in eastbound cargo volume and 2.2% in westbound as compared with 2009. The slump in U.S. consumer market will drag out in 2010, expecting a 2.2% growth in eastbound cargo volume on Atlantic routes and a smaller 1.6% growth in eastbound as compared with 2009. It is expected that in 2010, the world oil demand will register 85.9 million barrels per day, with shipping trade volume of crude oil jumping by around 3%, and refined oil by about 2%.

The pressure of overcapacity will remain immense due to the rapidly growing shipping capacity. The Report estimates an actual growth of about 10% in international dry bulk capacity, and a new-ship delivery reaching nearly 110 million tons in 2010, equivalent to 24.9% of the existing level; the growth rate of Chinese coastal bulk capacity will maintain at about 15%. In 2010, with an additional capacity of 2.08 million TEUs in the global container liners and a dismantlement volume of 0.17-0.2 million TEUs, the whole capacity will ascend by about 13%; the dismantlement of single-hull tankers will produce less positive effects in 2010, arriving an optimistic estimation of 1-2% or a pessimistic one of 4% in capacity growth. The capacity will remain surplus for a long period of time. Given that, despite slight improvements in world’s total shipping volume, the freight rates will remain stagnant at large, with varying performance among different markets. In 2010, the annual average of BDI index will fluctuate between 3500-4000 points. Amidst the overall downturn in container freight rates, Asian and European routes are expected to project a relatively promising view, while the Pacific and Atlantic ones will usher in a slight but limited growth. The second half of 2010 may expect a recovery in tanker freight rate, but the overall freight rate will remain low throughout the year.

In response to the relatively sluggish and uncertain shipping market, the Report suggests that the shipping enterprises should timely optimize their fleet structures to accelerate the elimination of old ships; strengthen the research and analysis on changing external environment so as to rationally response to the shipping market; effectively prevent pirate attacks and change the insurance terms; establish stable long-term cooperative relations with clients to ensure cargo supplies; strengthen internal cooperation among shipping enterprises to maintain a good shipping order; respond positively to the development requirements of the international community to realize low-carbon shipping; and appeal to the government for policy supports.

The press conference was jointly organized by SMU, Shanghai North Shipping Service Cluster Construction & Development Office and SISI.

January 20, 2010
Shanghai International Shipping Institute