| "In the industry, people are expecting the boom, created by the demand pool of China, to continue beyond 2008. India could well replace China in terms of quantum of export and import. I do not perceive the Baltic Dry Index (BDI), the bellweather for dry bulk carrier, falling below the 2500 level," Karan Paul, chairman of Apeejay Surrendra Group, said. Till recently, 2,500 was the ceiling for most industry players. |
| The buoyancy was expected both in oil tankers as well as in the break bulk carrier trade. India was heavily dependent on imported oil, with 70 per cent of domestic demand met through import of crude. |
| The import volumes would rise in the coming years and add to demand for crude carriers. |
| "Even though India is relatively well off in natural resources, there will be buoyancy in break bulk as well as manufacturing is set to grow. More importantly, there are not enough break bulk carriers coming in the system there days," Paul added. |
| In fact, there is already a shortage of bulk carrier in the market. |
| Shipyards across the world were more keen to build very large or ultra large crude carriers (VLCC/ULCC) as margins were very high. |
| It made sense for them to build a VLCC at $ 90-100 million as compared to a capesize vessel with a price tag of about $ 40 million or less but occupying the same yard space, Paul pointed out. |
| Shipyards would be able to charge more for crude carriers as all single hull crude ships have to be replaced with double hull carriers. |
| This would create further squeeze on the number of new break bulk and dry cargo carriers coming out. |
| "Everybody expected the Chinese economy to slip into recession and BDI crashed from over 5,000 to 2,800 level in June. But those fears turned out to be unfounded and BDI has again gone up to over 4,000 level," Paul remarked when asked about recent trends in the sector. |
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