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Shipping Monthly Report – January 2012
• The Baltic Dry Index (BDI) declined by 6% MoM to 1738 in
December, 2011. In spite of the Capesize Index remaining
flat, the BDI declined owing to a fall of 5% and 13% in the
Panamax and Supramax Index, respectively. Freight rates
for Capesize vessels were stable as iron ore and coal imports
by China remained strong. Freight rates across vessel
categories increased in the first half of December 2011 and
declined sharply in the second half
• The Dirty Tanker Index rose by 18% MoM to 930 while the
Clean Tanker Index gained sharply by 26% to 908 in
December 2011. VLCC freight rates maintained their positive
momentum and rose by 12% MoM while freight rates for
Suezmax and Aframax increased sharply by 140% and 136%,
respectively
• LPG freight rates in December 2011 displayed a robust trend.
Both medium sized and large vessels recorded gains on an
MoM basis in the range of 3% to 20%
• Utilisation levels for drill ships, semi-subs and jack-ups
remained stable. Utilisation levels for drill ships, semi-subs
and jack-ups were at 83%, 86% and 82%, respectively, in
December 2011
Outlook
Dry bulkers
In the near term, dry bulk freight rates are expected to remain weak due to
escalating Chinese iron ore inventory. In CY11, the dry bulk fleet
expanded by 14.8% and the fleet utilisation rate dropped from 92% to
87%. Initial industry estimates suggest a tonnage growth demand of ~
6% in 2012 and around additional 2% demand could be created due to an
increase in long hauls in iron ore trade. Even though tonnage demand is
expected to increase, with net fleet addition of 11-12% (excluding
scrapping and slippages), freight rates are expected to remain under
pressure in 2012.
Tankers
Over the longer term, crude oil tanker freight rates are expected to remain
subdued owing to the oversupply of tonnage with 11% of present fleet
expected to be delivered in 2012, 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.
LPG carriers
LPG freight rates are expected to continue the positive momentum in the
near term as some owners decided to avoid rate fights to secure business
at opex level. Such an arrangement between vessel owners could lend
some sort of stability to the freight rates and minimise the downside risk.
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
January 2012. High capex spend by major global oil exploration/drilling
companies is likely to lead to higher utilisation levels for offshore vessels.
Tanker freight rates in December 2011, displayed a positive trend across
categories. VLCCs continued their positive momentum from November
with an MoM rise of 12% while Suezmax and Aframax rates, which had
declined sharply in November, rose by 140% and 136%, respectively in
December 2011. CY11 has recorded the lowest average freight rates
across categories over the last eight years. The freight levels at present for
all categories are quite low compared to their historic levels as substantial
oversupply across various categories is keeping freight rates weak.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Shipping Monthly Report – January 2012
• The Baltic Dry Index (BDI) declined by 6% MoM to 1738 in
December, 2011. In spite of the Capesize Index remaining
flat, the BDI declined owing to a fall of 5% and 13% in the
Panamax and Supramax Index, respectively. Freight rates
for Capesize vessels were stable as iron ore and coal imports
by China remained strong. Freight rates across vessel
categories increased in the first half of December 2011 and
declined sharply in the second half
• The Dirty Tanker Index rose by 18% MoM to 930 while the
Clean Tanker Index gained sharply by 26% to 908 in
December 2011. VLCC freight rates maintained their positive
momentum and rose by 12% MoM while freight rates for
Suezmax and Aframax increased sharply by 140% and 136%,
respectively
• LPG freight rates in December 2011 displayed a robust trend.
Both medium sized and large vessels recorded gains on an
MoM basis in the range of 3% to 20%
• Utilisation levels for drill ships, semi-subs and jack-ups
remained stable. Utilisation levels for drill ships, semi-subs
and jack-ups were at 83%, 86% and 82%, respectively, in
December 2011
Outlook
Dry bulkers
In the near term, dry bulk freight rates are expected to remain weak due to
escalating Chinese iron ore inventory. In CY11, the dry bulk fleet
expanded by 14.8% and the fleet utilisation rate dropped from 92% to
87%. Initial industry estimates suggest a tonnage growth demand of ~
6% in 2012 and around additional 2% demand could be created due to an
increase in long hauls in iron ore trade. Even though tonnage demand is
expected to increase, with net fleet addition of 11-12% (excluding
scrapping and slippages), freight rates are expected to remain under
pressure in 2012.
Tankers
Over the longer term, crude oil tanker freight rates are expected to remain
subdued owing to the oversupply of tonnage with 11% of present fleet
expected to be delivered in 2012, 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.
LPG carriers
LPG freight rates are expected to continue the positive momentum in the
near term as some owners decided to avoid rate fights to secure business
at opex level. Such an arrangement between vessel owners could lend
some sort of stability to the freight rates and minimise the downside risk.
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
January 2012. High capex spend by major global oil exploration/drilling
companies is likely to lead to higher utilisation levels for offshore vessels.
Tanker freight rates in December 2011, displayed a positive trend across
categories. VLCCs continued their positive momentum from November
with an MoM rise of 12% while Suezmax and Aframax rates, which had
declined sharply in November, rose by 140% and 136%, respectively in
December 2011. CY11 has recorded the lowest average freight rates
across categories over the last eight years. The freight levels at present for
all categories are quite low compared to their historic levels as substantial
oversupply across various categories is keeping freight rates weak.
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