No swift recovery seen for depressed bulk freight rates

Busan, South Korea

BULK freight rates are set to remain under pressure, as cooling commodity demand coincides with a bigger vessel fleet, increasing the pressure for consolidation in the sector, industry analysts said.

Sokje Lee, executive director for Korea at JP Morgan, said there was a risk shipping rates could remain low for years. "Don't look for an increase in freight rates. Instead, the way to make money is to save costs," he told a shipping conference in the Korean port city.

Mr Lee said that weak rates were a particular threat to Chinese ship makers as their labour costs had tripled in the last decade and were now higher than in South Korea and Japan. "Because of this, we are going to see big restructuring of Chinese yards in the next two ye…