Bulkers bounce back

While last year was very poor for operators of bulk tonnage there are now strong signs of a good recovery and people are more optimistic.

From the coast of Brazil to the boardrooms of Europe there is a faint smile on the lips of bulker owners. The past few years have not been particularly good for shipping and the bulk trades have suffered. The collapse of economies in the Far East led to a sharp drop in rates for many trades. The large number of newbuildings on order has exacerbated this situation.

Jens Ditlev Lauritzen, president of Lauritzen Bulkers, says that it is seeing a more healthy market since the bulk trades bottomed out in mid 1999. He attributes this primarily to the recovery of the Asian economy. “There is an impact with increased cargo being carried throughout the Pacific basin, plus the increased demand for exports from Europe,” comments Mr Lauritzen. For the moment, in terms of fleet utilisation, the initial improvement is in capesize ships, which will then filter through to the smaller sizes.

“Handymax ships with smaller capacities, and any demand for semi-produced products always shows a bit of a lag,” notes Mr Lauritzen. Despite the upward move the market is not recovering as fast as has been the case in the past. This is attributed to the impact of the heavy newbuilding programme and the number of new deliveries coming into the trades.

From Lauritzen?s perspective, the growth in its bulk trades will be primarily in the Far East. However, Mr Lauritzen believes this does not suggest a decline in the Atlantic trades. “We remain committed to the Atlantic trades, but see any growth in volumes on these routes as only being of the order of a couple of percentage points, although there will be increased profitability through better rates and improved fleet utilisation,” he adds.

This contrasts with a much bigger anticipated growth in volumes and profitability on the routes to and around the Pacific basin. In anticipation of this growth in the Pacific basin, the company established a subsidiary operation out of Melbourne some time ago, and also has offices in China and Japan.