(Dry-bulk shipping item updated for stock-price movements.)
NEW YORK (
) -- A top executive at
, the huge Chinese dry-bulk shipping company, predicted that his industry would see something of a recovery in shipping rates in 2010, but warned that the market would remain volatile.
In remarks to reporters in Hong Kong Tuesday, Cosco President Zhang Liang said he expects the Baltic Dry Index, a measure of dry-bulk shipping rates across vessel sizes, to move between a range of 3,000 and 4,000 on average during 2010, according to
That would be in line with present levels. Tuesday's reading of the BDI was 3,208, down 2.6% from the previous day -- a decline that comes after a brief strengthening trend last week.
The average going rate for a capesize vessel, the largest type of bulk carrier in the world, fell to $40,100 a day on Tuesday, down $2,500 from Monday.
Volatility has been a hallmark of the industry even before the financial crisis and recession. After reaching record highs in 2008, dry-bulk rates crashed to record lows in the late winter of 2009, only to recover sharply in the fall. Largely driven by China's thirst for raw materials, and the vicissitudes in its buying trends, bulk shippers saw capesize rates surmount $80,000 a day in October only to fall back again as China eased back on the importing throttle.
Cosco's Zhang warned about the number of freshly built ships scheduled to come into service this year, which could weigh on rates. "We are still facing huge pressure this year because of oversupply of new ships, iron-ore talks and fuel costs,"
quoted Zhang as saying. He also indicated that Cosco, for one, will delay the vessel deliveries it has scheduled for 2010.
of late. Some of the better-known names in the sector --
Genco Shipping & Trading
Eagle Bulk Shipping
-- saw their share prices decline through last week.
On Tuesday, dry-bulk stock were mixed. Among the larger-cap names, Diana shares led the decliners, losing 2% to $15.76. DryShips, Genco and
were all lower by less than 1%, while Eagle Bulk was gaining 0.9% to $5.62.
-- Written by Scott Eden in New York
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Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining TheStreet.com, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.