The mainland’s tighter controls on bank lending will have a negative impact on the dry bulk shipping markets as spending on real estate and infrastructure slows. Ship owners are already facing a slump in dry freight rates as a flood of new tonnage cometes with slower growth in cargo demand. Average frieght rates for an 180,000 dead-weight tonne dry cargo capesize ship carrying iron ore from Brazil to China have fallen to an average US$21,000 per day this year compared with US$48,000 per day last year.
Dry cargo ships totalling 106 million dead-weight tonnes were expected to be delivered this year, equivalent to a 17% in fleet growth. But comparison volumes of iron ore, coal, grain and other dry cargoes were set to grow by just 7.5% in 2011.
Demand growth will fall again new year. Freight rates will remain under pressure.