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HAMBURG: October 30, 2018. Speaking at the annual Association of Bulk Terminal Operators conference, Frank Grone, director of brokerage company Frachtcontor said that while the ocean bulk carrier market is improving, the scrapping of 60 million deadweight tonnage in 2015 and 2016 had left owners with “a complete wipe out” of their invested capital.

He said the current recovery was due to a four percent rise in demand last year followed by an expected three percent this year, coupled with port congestion and slow -steaming that had kept tonnage off the market.

Dry Bulk CarrierIron ore remains a major market driver with an expected two percent increase this year as suppliers in Brazil and Australia expand production, while China and India coal imports should rise seven and six percent respectively.

China, India, Japan and Korea import 900 million tons of coal annually – compared to Britain and Germany that import 110 million. “The music,” said Grone, is “clearly being played in the Pacific Rim”.

Noting Germany now gets 36 percent of its energy from renewables, he suggested the move by Australian coal port Newcastle to build an ultra large container facility might be a straw in the wind for European bulk counterparts.

Grone also warned conference delegates that the implementation of a global sulphur cap due to come into force in 2020 will mean 66 percent of all fuel burned will have to be switched to comply with the IMO rules.

He said owners of an estimated 60,000 vessels face the option of continuing to burn high sulphur fuels and risk fines, port detentions or trade bans; install “expensive” scrubbing technology; or switch to gasoil and find a way to pass the cost on to ship charterers.

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