Jan.31--SHANGHAI International Shipping Institute (SISI) predicts in its latest report that the dry bulk shipping rate will be increasing at a rate of seven to eight per cent this year as domestics economy continues to grow steadily, Xinhua reports.

China's dry bulk shipping market plunges in 2012. The China Coastal Bulk Freight Index (CBFI) posted by Shanghai Shipping Exchange (SSE) was at an average of 1,104.84 points last year, with a 13-percentage-point-faster decline of 19.25 per cent year on year.

As coal import increased and demand for electricity coal weakened, the shipping rate of coal fell 23.4 per cent to an average of 1,569.71 points, near the lowest point in 2009. With shrinkage of steel demand and high inventory, ore shipping rate slid 15.51 per cent to 935.54 points. Grain shipping rate dived 27.98 per cent to 743.14 points under the impact of increased corn import.

However, SISI has confident for the outlook of 2013. It expects modest recovery in the dry bulk shipping market and an increase of eight per cent in the shipment volume. It also predicts that capacity growth will continue to slow down to about 6 per cent, but capacity will still remains at a high level and supply-demand imbalance is still severe.

SISI estimated that CBFI will be fluctuating between 1,100 to 1,400 points this year. Coal shipping rate will be rising steadily. Ore and grain shipping rate tend to be volatile but will still manage to keep growing.