S. Korean shipping lines face rough seas next year: report

SEOUL, Dec. 16 (Yonhap) -- South Korean shipping lines are expected to see their
ongoing business slump continue into next year amid an oversupply of vessels and
low freight rates, a report said Wednesday.

According to Hyundai Research Institute, container and bulk shipments worldwide
will increase 2.4 percent and 4.9 percent, respectively, next year, while
container ship tonnage is expected to rise 12.7 percent and bulk carrier tonnage
11 percent.
"A glut in vessels is forecast to continue into next year, making it difficult
for the sector to recover to pre-crisis levels," the institute said.
While freight rates are rising in line with a mild economic recovery, local
shippers' profitability will remain weak, it said.
The Baltic Dry Index -- an indicator of shipping charges for dry cargo ships --
surpassed the 4,000-mark in early December after falling to as low as 663 late
last year amid the economic crisis touched off by the collapse of Lehman
Brothers.
But the report warned that the index may not continue its upward trend into next
year due to lingering uncertainties over the global economy.
The institute predicted that the country's Big-3 shippers -- Hyundai Merchant
Marine Co., Hanjin Shipping Co., and STX Pan Ocean -- will suffer operating
losses next year.
sam@yna.co.kr
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