Shipping monthly report - August 2013: ICICIdirect

The Baltic Dry Index (BDI) declined 9 percent MoM to 1062 levels post gaining 16.6 percent in June 2013. Gains were largely due to iron-ore re-stocking by China, which moderated in July 2013 leading to regression of rates. Similarly, Baltic capsize Index also declined 13 percent MoM to 1881 levels. However, Baltic Panamax and Supramax index held ground gaining a marginal 5 percent whereas the Handymax index shed 6 percent on an MoM basis.
The Clean Tanker Index (BCTI) gained an impressive 9.6 percent MoM to 615 levels. The Dirty Tanker Index (BDTI) also grew 8.1 percent to 624 level in July 2013. VLCC charter rates (TCY), post gaining 26 percent in July 2013 to 11431 levels, are able to cover their operating expenses. Also, Suezmax and Aframax rates rebounded strongly at 8608 (up 191 percent) and 9565 level (up 45 percent), respectively, on an MoM basis
LPG carrier rates in the VLGC segment moderated marginally by 2.5 percent MoM against gain of 7 percent MoM in June 2013. However, charter rates for the medium segment (57000 cbm) remained steady whereas that of the MGC segment (24000 cbm) firmed up 9.6 percent MoM basis
Utilisation levels for semi-subs remained steady at 93 percent for July 2013 whereas that of drill-ship and jack-up gained 200 bps and 100 bps, respectively, to 87 percent in July 2013.
Dry bulkers
The Shipbuilding index showed a spike of 8 percent growth MoM. However, the global cargo demand data does not support such high level of shipbuilding activity. Data from China still remains dampened amid decline in iron-ore imports from its top four importers by 9 percent for July 2013 and marginal de-growth (0.6 percent in July 2013) in iron-ore inventory at 71.1 MT. Steel output data from China also showed a decline of 3.5 percent for the month of July 2013. Consequently, the Capesize index declined 13 percent whereas Panamax and Supramax index showed marginal growth of 5 percent. On the capacity front, robust delivery continued in July 2013 with 4.6 million dwt joining the fleet. However, new order till July 2013 (YTD) in the dry bulk segment is 34 million dwt. The order book till CY15 in the dry bulk segment stands at 98 million dwt as on July 2013.
Tanker
Tanker rates continued to rise on the back of Asian demand. However, the geopolitical situation in Egypt and Libya remains non-conducive, thereby threatening oil supply from these regions.
LPG carriers
VLGC rates (78000 cbm) retraced marginally by 2.5 percent MoM in July 2013, post gaining 7 percent in the previous month, whereas, other segment rates continue to remain flattish. However, medium range gas carriers (24000 cbm) charter rates spiked up by 9 percent MoM. Further, we believe rates are expected to remain range bound.
Offshore vessels
Offshore vessels utilisation continues to remain at elevated levels with utilisation for drillship and jack-up perking up considerably in July 2013. Going ahead, we believe the trend will continue with a marginal improvement, thereby supporting charter rates.
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Source: Money Control