Drewry’s Multipurpose Time Charter Index Indicates Ongoing Market Fluctuations

• Drewry’s Multipurpose Time Charter Index, a key indicator of daily rates for multipurpose vessels, has shown notable trends and fluctuations in recent months.
• The index measures the average daily rates for chartering multipurpose vessels and is indicative of market conditions in the shipping sector.

As of March, the index stands at USD8,834 per day, surpassing Drewry’s forecasted value of USD8,821 for February. The ongoing situation in the Red Sea and a seasonal boost for smaller vessels have contributed to increased utilization, defying initial projections.

Outlook for March

Drewry anticipates a further uptick in the index for March, although at a more modest rate compared to previous months. The expected increase is projected to be 0.2 percent, reaching USD8,853 per day. This would represent a decline of 3.5 percent since March 2023.

Recent Trends

The February Multipurpose Time Charter Index witnessed an increase, reaching USD8,783 per day at the end of January, slightly above the forecasted value of USD8,753. Factors such as the Red Sea situation and increased vessel utilization contributed to the positive performance.

Year-on-Year Decline

Despite these fluctuations, there is a consistent year-on-year decline in the index. For February, the expected decline is 6.5 percent compared to the same month in 2023.

Contributing Factors

Drewry attributes the fluctuations in the index to various factors, including the ongoing Red Sea situation, seasonal boosts for smaller vessels, and increased utilization. The situation in both the Red Sea and the Panama Canal has led to heightened vessel utilization, impacting the overall index.

Market Challenges

The report notes challenges in the market, such as increased capacity and pressure from the container sector. While project cargoes, particularly in wind energy, provide some support, the overall market faces uncertainties related to inflation, geopolitical factors, and global energy prices.

Long-Term Projection

Drewry expects a gradual decline in rates, emphasizing that the multipurpose charter market will remain under pressure. The decline is attributed to factors such as increased global uncertainty, weakened demand, and potential market encroachment.

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