According to the Shanghai International Shipping Institute (SISI), China’s dry-bulk shipping industry will likely see a surge in bankruptcies this year as freight rates hit record lows and the country’s demand for imports wanes. 

Reuters reports that the Baltic Dry Index hit an all-time low of 468 points on Tuesday. Dry-bulk shipping firms continue to face losses and liquidity woes. Among the Chinese firms that have already gone bust are dry cargo shipper Winland Ocean Shipping Corp, which filed for bankruptcy protection in February last year, and state-owned shipbuilder Wuzhou Ship Repairing & Building Co Ltd, which filed for bankruptcy last month. 

According to the SISI, more than 60 percent of the dry-bulk shipping firms it surveyed were struggling with long-term losses, while about 40 percent faced liquidity problems. It said it had spoken to 50 of China’s largest dry bulk shipping lines. 

“The market is extremely depressed and these conditions are likely to continue in 2016, exacerbating dry bulk firms’ losses, increasing costs and creating obstacles to obtaining financing. This will kick-start a wave of bankruptcies,” state-backed SISI said in a report published on Tuesday.