12/31/2004 MALAY MAIL - DEMAND for ship space, especially that of bulkcarriers, may rise in the short term in the wake of the recent tidal waveswhich slammed south Asia, shipping sources in Malaysia said yesterday.

Expectations are that demand for cargo space on bulk carriers may risebecause of freshly anticipated demand for supply of building materialssuch as cement, steel and wood.

Prior to the tragedy, the price of dry-bulk ships, used to carry coal,iron ore, soya beans and other commodities, had risen as earnings reachedrecords on surging demand from China.

As a result of this, the Baltic Dry Index, which measures the cost ofshipping dry-bulk goods on different routes and different ship sizes, hasaveraged 4510 this year, from 2617 last year and 1138 in 2002.

A 1995-built Panamax, the largest dry-bulk vessel able to transit thePanama Canal, costs US$28 million (RM106.4 million), 60 per cent more thana year ago, shipbroker R.S.

Platou AS said last month.

"Fresh demand, because of the disaster, is expected to push freight ratesnorthwards," a Port Klang-based freight forwarder said.

On concerns that there will be congestion at ports across the affectedareas in Asia, industry players say port operations are unlikely to behampered.

"The turnaround time might take a little bit longer...but we don't expecta massive breakdown in service at the ports akin to the 2000 Chinese NewYear Festival congestion," industry players say.

Instead, what industry people expect is a re-routing of cargo from damagedport to the nearest available facility.

Industry players also point out that most of the affected facilities aremade up mostly of jetties in the Sumatra area.

While in Sri Lanka, some ports have been affected but since the islandserves as a transhipment point, most of the ships will most likely bere-routed to India in the immediate term.