Gloomy forecast for dry-bulk shipping companies

Pacific Basin Shipping Ltd., Hong Kong?s biggest operator of commodity vessels, expects more shipping companies to fail after the global recession caused freight rates to plunge 92 % last year. “More dry-bulk companies may fall,” Deputy Chief Executive Officer Klaus Nyborg said. “The market change was so sudden and so severe. At least four dry-bulk shipping lines, including Armada (Singapore) Pte and Britannia Bulk Holdings Plc, have sought protection from creditors worldwide since October as the global recession saps demand for shipments of iron ore and coal.

China?s 4 trillion yuan ($585 billion) economic stimulus plan has also so failed to spur demand in the world?s biggest market for dry-bulk ships. “We have not seen any signs of recovery in China,” Nyborg said. “The outlook is very challenging.”

Pacific Basin plans to take advantage of the market downturn to charter ships at lower costs, Nyborg added. Last month, the company agreed to make one-off payments to shipowners to cancel some existing charter deals. It then signed new contracts running up to 2012 covering the same vessels at cheaper rates.