Chinese dominance in the bulk sector could keep freight rates under control[ds_preview] for years. Three shipping majors have placed orders for 30 giant Valemax vessels (up to 400,000 dwt) worth 2,5 bn $.
This move of giants Cosco Group, China Merchants Group and ICBC Financial Leasing could tighten Bejings grip on iron-ore shipments over the next decade and increase pressure on western shipowners struggling to cope with record low freight rates, the Wall Street Journal quotes people involved in the matter. Deliveries are scheduled to begin in 2018. In one of the industry’s longest ever downturns dozens of dry-bulk operators have already gone bankrupt while others are delaying loan payments or cancelling newbuilding orders. According to WSJ’s report, brokers estimate the Valemax purchases will Chinese carriers give control of about 30% of total iron-ore imports into the country. Such dominance could keep freight rates under Chinese control for years.
