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Shipping Monthly Report – January 2011
• The Baltic Dry Index (BDI) declined 16% to 1773 in December 2010
led by a 19% decline in the Capesize index to 2346 and 22%
decline in Panamax index to 1845. Steel production in China
declined 0.3% MoM to 50.2 million tonnes (MT) in November.
However, iron ore imports by China increased 26% MoM to 57.4
MT along with a 2.4% MoM increase in inventory levels to 76 MT
• The Dirty Tanker Index increased 18% to 1043 level while the
Clean Tanker Index increased 3% to 759 level in December 2010.
Clean and Dirty Tanker Index both registered significant gains
with the seasonal rise in heating oil demand from US and Europe
• LPG freight rates for large sized vessels declined while rates for
mid sized vessels increased in December 2010
• Utilisation levels for drill ships, semi-subs and jack-up rigs was at
74%, 82% and 72% in December 2010 as against 72%, 84% and
74% in November 2010, respectively
• New build as well as second-hand asset prices have remained
constant in December except for new build Capesize bulk carriers,
which declined ~18%
• New build orders for dry bulk vessels increased from 128 to 159
vessels while new build orders for tankers increased from 27 to 44
vessels in December 2010
• Demolition of vessels increased from 101 vessels to 115 vessels in
December 2010. In tonnage terms, 3.0 million DWT of fleet was
scrapped as against 2.2 million DWT in the previous month.
Average scrap prices increased to $365 per LDT in December 2010
Outlook
Dry bulkers
Dry bulk freight rates are expected to decline in the early part of January
2011. Flooding in Australia has resulted in closure of ports in Queensland
leading to a halt in shipments of coal. This is expected to keep vessel
rates under pressure in the first half of January.
Tankers
Crude and product tanker freight rates are expected to decline in the later
part of January 2011 on account of a decline in heating oil demand with
the easing of cold weather conditions in Europe.
LPG carriers
LPG freight rates are expected to remain firm in January 2011 on account
of a rise in LPG shipments.
Offshore vessels
Utilisation level of offshore vessels is expected to rise while vessel charter
rates are expected to remain firm in January 2011. High crude oil prices
have not translated into higher utilisation levels but are likely to increase
in the coming months.
Tanker freight rates reported a rise in December across asset categories
except VLCC vessel rates, which registered a decline. VLCC freight rates
declined to $11156 per day while Suezmax and Aframax freight rates
increased to $18250 and $20364 per day, respectively. Vessel freight rates
recovered on the back of a rise in heating oil demand on account of
severe cold weather conditions in Europe.
Dry bulk freight rates declined in December as rates for Capesize vessels
declined by 13% while Panamax, Supramax and Handysize vessel rates
declined by 10%, 13% and 8%, respectively.
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