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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 – D e c e m b e r 2 0 1 1
The Baltic Dry Index (BDI) declined by 6% to 1846 in November, 2011. In
spite of the Capesize Index gaining by 5%, the BDI declined owing to a
steep fall of 11% each in the Panamax and Supramax index. Freight
rates rose for Capesize vessels as iron ore and coal imports to China
remained strong while freight rates for smaller sized vessels like
Panamax and Supramax declined on account of lower export volumes of
iron ore from India. We expect freight rates for Capesize to remain
range-bound with a positive bias while Panamax vessel’s freight rates
should firm up with a gradual up-tick in Indian iron ore exports to China.
• The Dirty Tanker Index rose by 2% to 788 while the Clean Tanker
Index remained flat with a marginal decline of 1% to 719 level in
November 2011. VLCC freight rates ventured into the positive
territory after four months while day rates for Suezmax and
Aframax declined sharply by 71% and 43%, respectively
• LPG freight rates in November 2011, displayed a weak trend,
particularly the larger vessels, with VLGC rates declining by 6%
MoM. MGCs declined in the range of 1-4% while LGC bucked the
trend by logging gains of 4% MoM
• Utilisation levels for drill ships, semi-subs and jack-ups remained
stable. Utilisation levels for drill ships, semi-subs and jack-up rigs
remained constant at 82%, 87% and 81%, respectively, in
November 2011.
Outlook
Dry bulkers
In the near term, dry bulk freight rates are expected to improve in spite of
high level of Chinese iron ore inventory as strong Chinese demand for
coal should enable freight rates to maintain a positive momentum. Over
the longer term, escalating fleet addition and lower scrapping would
reduce the fleet utilisation rate. Consequently, excess supply of tonnage
would keep tabs on the up move in freight rates.
Tankers
Over the longer term, 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 charter rates and keep them subdued. Some
positive momentum is likely for VLCCs while Suezmax day rates are
expected to improve after a steep decline in November 2011.
LPG carriers
LPG freight rates are expected to remain weak particularly for VLGC and
LGC while MGC freight rates are expected to remain flattish. Smaller
vessels could face downward pressure in freight rates owing to a large
proportion of vessels being added to the global fleet in 2011.
Offshore vessels
Utilisation levels for offshore vessels are expected to improve while
charter rates are expected to remain range-bound with a positive bias in
December 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 – D e c e m b e r 2 0 1 1
The Baltic Dry Index (BDI) declined by 6% to 1846 in November, 2011. In
spite of the Capesize Index gaining by 5%, the BDI declined owing to a
steep fall of 11% each in the Panamax and Supramax index. Freight
rates rose for Capesize vessels as iron ore and coal imports to China
remained strong while freight rates for smaller sized vessels like
Panamax and Supramax declined on account of lower export volumes of
iron ore from India. We expect freight rates for Capesize to remain
range-bound with a positive bias while Panamax vessel’s freight rates
should firm up with a gradual up-tick in Indian iron ore exports to China.
• The Dirty Tanker Index rose by 2% to 788 while the Clean Tanker
Index remained flat with a marginal decline of 1% to 719 level in
November 2011. VLCC freight rates ventured into the positive
territory after four months while day rates for Suezmax and
Aframax declined sharply by 71% and 43%, respectively
• LPG freight rates in November 2011, displayed a weak trend,
particularly the larger vessels, with VLGC rates declining by 6%
MoM. MGCs declined in the range of 1-4% while LGC bucked the
trend by logging gains of 4% MoM
• Utilisation levels for drill ships, semi-subs and jack-ups remained
stable. Utilisation levels for drill ships, semi-subs and jack-up rigs
remained constant at 82%, 87% and 81%, respectively, in
November 2011.
Outlook
Dry bulkers
In the near term, dry bulk freight rates are expected to improve in spite of
high level of Chinese iron ore inventory as strong Chinese demand for
coal should enable freight rates to maintain a positive momentum. Over
the longer term, escalating fleet addition and lower scrapping would
reduce the fleet utilisation rate. Consequently, excess supply of tonnage
would keep tabs on the up move in freight rates.
Tankers
Over the longer term, 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 charter rates and keep them subdued. Some
positive momentum is likely for VLCCs while Suezmax day rates are
expected to improve after a steep decline in November 2011.
LPG carriers
LPG freight rates are expected to remain weak particularly for VLGC and
LGC while MGC freight rates are expected to remain flattish. Smaller
vessels could face downward pressure in freight rates owing to a large
proportion of vessels being added to the global fleet in 2011.
Offshore vessels
Utilisation levels for offshore vessels are expected to improve while
charter rates are expected to remain range-bound with a positive bias in
December 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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