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Australia Seen Passing Brazil as Driver of Ship-Demand Growth

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Dec. 18 (Bloomberg) -- Australia is poised to overtake Brazil as a source of demand growth for ships as the nation’s iron-ore supply to China expands faster than the Latin American country’s, said Clarkson Plc, the world’s largest shipbroker.

While demand growth on the Brazil-to-China trade route exceeded that of Australia-to-China by 48 percent between 2007 and 2011, that is now reversing, Clarkson analyst Sarah Holden said in a report published on the shipbroker’s website yesterday. The note was referring to ton-mile demand, which multiplies cargo volumes by distances. China is the biggest importer of the raw material used to make steel.

“Unless there is a greater-than-expected rise in Brazil’s long-haul exports, Australia is likely to contribute the most to trade growth in terms of both tons and ton-miles in the next few years,” Holden said.

Australia is the world’s largest iron-ore exporter by volume while Brazil, the second biggest, creates greater demand for shipping because of the distances involved in supplying China, according to Clarkson. Smaller suppliers including Liberia, Peru and Sierra Leone increased their share of the global market to 25 percent from 16 percent in early 2009, according to the note.

To contact the reporter on this story: Alaric Nightingale in London at anightingal1@bloomberg.net

To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net

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