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S h i p p i n g M o n t h l y R e p o r t – A u g u s t 2 0 1 1
• The Baltic Dry Index (BDI) declined by 11% to 1264 in July 2011
due to a 14%, 6%, and 15% fall in Capesize, Panamax and
Supramax index respectively. Freight rates declined in July for
smaller vessels like Panamax and Supramax owing to lower Indian
exports of iron ore to China due to the monsoon season in India.
• The Dirty Tanker Index declined by 3% to 721 while the Clean
Tanker Index declined by 1% to 684 level in July 2011. It was
carnage for VLCC’s with freight rates moving into negative
territory , while day rates for Suezmax rose by 61% (on a
abnormally low base) and Aframax freight rates declined by 8%.
• LPG freight rates displayed a steady to firm trend in July 2011
with VLGC’s day rates registering a sharp up move of 8%, while
MGC’s being constant in the range of 1%-2% with a positive bias.
• Utilisation levels for drill ships, semi-subs and jack-ups marginally
improved. Utilisation levels for drill ships, semi-subs and jack-up
rigs was reported at 80%, 87% and 80% in July 2011 as against
79%, 86% and 79% in June 2011. Day rates for rigs displayed a
mixed trend with Deep water depth rigs day rates moving up
marginally, while Mid water depth rigs moved up strongly,
whereas Jack-ups still continued to face pricing pressure.
Outlook
Dry bulkers
Dry bulk freight rates are expected to remain range bound with a negative
bias in August on the back of Indian monsoon season which will most
likely reduce iron ore exports from India. Also, China could be importing
lower volumes of iron ore due to current high level of inventories. China’s
iron ore inventory level is at an all-time high of 94 million tonnes and steel
production in China is expected to remain slow on account of restriction
of electricity allocation to steel plants. On the positive side, from a
medium term perspective, China’s thermal coal fixtures are likely to
remain firm, while the lifting of the Russian wheat export ban and the
recovery of Australian coal mines could lend support to the dry bulk
freight rates.
Tankers
Crude oil tanker freight rates are expected to remain subdued owing to
the oversupply of tonnage which would handicap the market. Even if
some demand emerges in the near term, the tonnage available is likely to
weigh on the charter rates and keep them subdued. Some positive
momentum is likely for VLCC’s, while Suezmax day rates are expected to
rise from its current appalling levels.
LPG carriers
LPG freight rates are expected to remain range-bound in August 2011 due
to availability of excess tonnage.
Offshore vessels
Utilisation levels for offshore vessels are expected to rise, while charter
rates are expected to remain stable in Aug 2011. High capex spend by
major global oil exploration/drilling companies is likely to lead to higher
utilisation levels for offshore vessels.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
S h i p p i n g M o n t h l y R e p o r t – A u g u s t 2 0 1 1
• The Baltic Dry Index (BDI) declined by 11% to 1264 in July 2011
due to a 14%, 6%, and 15% fall in Capesize, Panamax and
Supramax index respectively. Freight rates declined in July for
smaller vessels like Panamax and Supramax owing to lower Indian
exports of iron ore to China due to the monsoon season in India.
• The Dirty Tanker Index declined by 3% to 721 while the Clean
Tanker Index declined by 1% to 684 level in July 2011. It was
carnage for VLCC’s with freight rates moving into negative
territory , while day rates for Suezmax rose by 61% (on a
abnormally low base) and Aframax freight rates declined by 8%.
• LPG freight rates displayed a steady to firm trend in July 2011
with VLGC’s day rates registering a sharp up move of 8%, while
MGC’s being constant in the range of 1%-2% with a positive bias.
• Utilisation levels for drill ships, semi-subs and jack-ups marginally
improved. Utilisation levels for drill ships, semi-subs and jack-up
rigs was reported at 80%, 87% and 80% in July 2011 as against
79%, 86% and 79% in June 2011. Day rates for rigs displayed a
mixed trend with Deep water depth rigs day rates moving up
marginally, while Mid water depth rigs moved up strongly,
whereas Jack-ups still continued to face pricing pressure.
Outlook
Dry bulkers
Dry bulk freight rates are expected to remain range bound with a negative
bias in August on the back of Indian monsoon season which will most
likely reduce iron ore exports from India. Also, China could be importing
lower volumes of iron ore due to current high level of inventories. China’s
iron ore inventory level is at an all-time high of 94 million tonnes and steel
production in China is expected to remain slow on account of restriction
of electricity allocation to steel plants. On the positive side, from a
medium term perspective, China’s thermal coal fixtures are likely to
remain firm, while the lifting of the Russian wheat export ban and the
recovery of Australian coal mines could lend support to the dry bulk
freight rates.
Tankers
Crude oil tanker freight rates are expected to remain subdued owing to
the oversupply of tonnage which would handicap the market. Even if
some demand emerges in the near term, the tonnage available is likely to
weigh on the charter rates and keep them subdued. Some positive
momentum is likely for VLCC’s, while Suezmax day rates are expected to
rise from its current appalling levels.
LPG carriers
LPG freight rates are expected to remain range-bound in August 2011 due
to availability of excess tonnage.
Offshore vessels
Utilisation levels for offshore vessels are expected to rise, while charter
rates are expected to remain stable in Aug 2011. High capex spend by
major global oil exploration/drilling companies is likely to lead to higher
utilisation levels for offshore vessels.
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