Rates for both dry and tanker freights continue their downward trend
2008-1-25
The Baltic Dry Index continued its free fall yesterday, retreating by 4.8% in London. The index, which tracks transport costs of commodities like iron ore and coal on international trade routes, fell by 298 points to 5,948 points yesterday, according to the Baltic Exchange. The most notable decrease was observed in the Capesize index, a point of reference for the dry bulk market. The index plunged by 6.32% at 7,352 points. According to yesterday's morning report provided by Dahlman Rose, capesize time charter rates stood at $86,748, down 2.9% from Wednesday's $89,311 and last week's $95,627. Nevertheless, compared with last year's figures at the same period, which stood at $68,684, capesize rates continue to be significantly higher. According to Omar Nokta's, head of Maritime Research for Dahlman Rose, comments, there are no new developments to report in the dry bulk market. Rate continue to lack momentum, with some softening evident in the capesize market, following some modest firming to start the week. "The vessel queue off Newcastle in Eastern Australia continue to decline, an indication of the lighter activity we have seen recently" Nokta writes. The situation appears to be deteriorating in the tanker trade. VLCC bookings in the Arabian Gulf/Far East route lost 15.1% in just one day, with rates retreating to $53,070. On a weekly basis, rates have lost about 43% of their value, down from $93,225. Again, when compared to last year's figures, tanker owners continue to receive higher fees, since 12 months ago, VLCC rates for the same route stood at $44,434. Several days of slow activity earlier this month has created a backlog of vessels in the Arabian Gulf, and even though volumes have picked up with the introduction of more February cargoes, rates continue to soften. The Suezmax market has been more stable of late, according to Nokta. "With crack spreads trending higher again, it remains to be seen whether the market could see some level of support in the coming weeks as the vessel backlog in the Arabian Gulf is cleared". Among the important developments, shipowners and charterers should be aware of is the expected weekly inventory report by EIA, which should show builds in crude and gasoline stocks of 1.5 million barrels and 1.4 million barrels respectively, against flat distillate inventories.
From: Hellenic Shipping News