The Drewry Multipurpose Time Charter Index tracks one-year period charter rates across a basket of vessel types and sizes and forecasts the market movement over the coming month. The vessel types include breakbulk and project cargo ships, says an article published in Drewry.
Drewry’s latest assessment
The Drewry Multipurpose Time Charter Index increased to $10,987 per day in February, representing a rise of 1.7% compared to the 2.2% rise seen in the previous month. Rates were in line with expectations over February, with a slight slowdown in rate growth.
That said, Drewry’s Index is up 69% since February 2021. Whilst the geopolitical situation casts a huge cloud over all of us, the short-term implications are unclear.
There remains very little spot market availability so any further rate increases due to the conflict are likely to be slow to hit the market. We do expect rates to continue to rise over March but again at much weaker growth rates of just 1.0% to $11,100 per day.
The Short-sea market saw little change in sentiment over February, indeed for last 6-9 months the question has been more about availability in this sector than rate paid.
However, the significant upturn in bunker prices at month end, caused by the appalling geopolitical situation, brings a huge amount of uncertainty to the market.
This sector is likely to be directly affected with the trades to and from Ukraine and Russia, particularly steel and grain, causing a shift in demand and potentially mode, as hundreds of bulk carriers are impacted.
There is also a significant Russian flagged fleet, but it is still too early to assess the longer-term implications of the impact of sanctions.
For the more heavylift capable fleet, events in the Black Sea region are having a muted effect compared to the ongoing supply constraints for container carriers in both the US and Asia.
However, the general uncertainty in the market coupled with rising fuel prices are also disrupting what was a far-from-normal market anyway.
Our expectation is that the current situation in Ukraine might provide further demand to the sector in the medium term, hence our subdued outlook for the coming month.
Related Research: Multipurpose Shipping Sector
For access to the latest charter rates and forecasts across a range of multipurpose vessel types subscribe to Drewry’s Multipurpose Forecaster.
Published quarterly it provides 5-year forecasts and market updates for the global Breakbulk and Heavy Lift shipping markets, together with supplementary monthly updates of the latest market developments, including charter rates and asset values.
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Source: Drewry
