| During 2006, bulk cargo shipment levels
changed little due to political instability.
Import cargo decreased by 3.67%, from
163.34 million tons to 157.34 million tons,
and export bulk cargo increased by 11.10%
from 140.62 million tons to 158.18 million tons.
Despite higher prices, crude oil imports have continued
to grow thanks to the expanding petrochemical and plastics
industry. This trend is expected to continue throughout 2007
and will result in the increased charter of petrochemical
related tanker vessels. Corn and soybean imports are also
expected to see modest increases during the next year.
Steel imports fell 11.29% to 1.069 million tons
in 2006 due to sufficient imports in 2005,
higher steel prices, political uncertainty,
and BOI’s pending approval to expand Sahaviriya’s
steel smeltery. However, the automobile industry’s
steel usage is expected to grow by 30-40% as auto
exports continue to grow.
Coal imports are also increasing and
are expected to continue in 2007
because of the support of the government
in using coal to produce electricity and
the investment in Indonesia by Banpu.
Rice is still the number one export cargo.
In 2006, 7.4 million tons of rice were exported.
This year, the levels are expected to reach 9-10 million
tons given poor rice production from other export
countries such as Vietnam.
Other main export cargos such as rubber,
steel and cement are not favorable.
The rubber industry was adversely affected
by a rainy year in 2006 as well as by
violence in southern Thailand. Cement
exports to the United States, according
to one exporter, have declined by almost 50%.
However, demand from the Middle East, India,
Bangladesh and Vietnam is expected to pick up
due to increased growth.
To meet this demand, small- and medium-sized ships,
ranging from 5,000 – 20,000 dwt, will be highly
needed to serve nearby and medium distance markets.
It is expected that 2007 will be better than 2006.
Freight rates in 2006 declined,
but by less of a percentage than
they did in 2004 and 2005. During 2004
and 2005, freight rates for 20,000 – 30,000
dwt-sized ships were around $14,000 – $15,000
per day and declined to around $11,800 per day
in 2006 due to excess shipping capacity in the market.
It is expected in 2007 that the freight rate will
increase by approximately $13,000 per day. Chinese
economic growth impact freight rates because of
growth in its heavy industries such as ship building.
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