SINGAPORE : The year has started off well for commodities and shipping rates amid signs of an improving global economy. But there have been worrying signs, including weak employment data from the US, and a much smaller than expected earnings report from America's largest aluminium producer, Alcoa. And experts at a seminar held by the Singapore Management University have said that any recovery in the commodities and shipping sectors is likely to be slow. Observers said commodity prices are likely to rise in 2010, as demand increases around the world. But investors looking to get in on the gains seen last year in sectors such as copper may have already missed the boat. Professor Helyette Geman, Wilmar International Professor in Commodities Business, Singapore Management University, said: "Over the year 2009, we have seen copper prices up by 140 per cent already, we may remain in the range of numbers we experience today. I do not see a major rise in copper prices for 2010." And while the experts are optimistic about a general improvement in 2010, they are concerned about its sustainability. Professor Geman said: "It is sustainable, but we are not going to go to the extreme numbers that we experienced in July 2008 when we saw oil at 137 dollars a barrel and other equivalent numbers in copper prices for instance." And any improvement in commodity prices is likely to bode well for shipping firms. However, observers said some sectors in the industry will fare better than others. Captain Subhangshu Dutt, director, Om Maritime Pte Ltd, said: "I expect the bulk carrier markets to continue this slow recovery. On the container segment, there is a concern that if the operators bring back their idle tonnage too soon, it might cause a sudden derailing." And with 11 per cent of container ships remaining idle around the world, the signs of a recovery in the international trade of consumer goods remain unclear. But the dry bulk carrier sector can look forward to a steady growth this year along with commodity prices. - CNA/ms

Source