Panama Canal to open amid shipping downturn

Panama Canal Authority crane ship Oceanus, navigates the Cocoli locks during a test of the newly expanded Panama Canal locks on Pacific side, in Cocoli, Panama, Monday, June 20, 2016. (Arnulfo Franco/AP Photo)

PANAMA CITY -- The $5.25 billion expansion of the Panama canal is set to open Sunday at a difficult moment for the international commercial shipping market.

Canal Administrator Jorge Luis Quijano said Wednesday the shipping market is cyclical, and will rebound.

"Things won't stay at zero. The world will continue to grow," Quijano said. "Eventually there Will be a rebound and the good thing is that we are prepared to take advantage of that when it occurs."

Quijano said Wednesday the canal expects to benefit in coming years from increased U.S. trade in oil and natural gas.

"We believe that the United States Will see significant growth in the future for its new export capacity for natural gas and oil," Quijano said. "That is what we are betting on, and that is why I feel so optimistic that the canal will do well."

The drop in world oil prices, the slowdown in China and other factors are affecting traffic and income at the canal.

But the expansion will allow larger ships to pass, increasing efficiency.

The expansion will double the canal's capacity, tap new markets such as liquid natural gas shipments and cut global maritime costs by an estimated $8 billion a year.