Freight market firms up on increased Chinese trade
Indian fertiliser imports, steel production to boost market further.
The VLCC earnings had touched its nadir in May 2009, when a carrier earned hardly $3,838 a day.
Amit Mitra
Hyderabad, May 10
The global freight market gained some torque in the last few weeks, fuelled by increased international oil transportation and more exports and imports by China.
outlook
Shipping companies expect the market to remain at this level and perhaps gain some more traction in the coming weeks.
India's increased import of fertilisers, higher steel production outside of China (mostly Europe) and North America's increased movement of thermal coal and de-icing salt are the other factors that are expected to keep the market steady, especially in the handy size and handy max segments, said analysts.
“We have seen significant freight market pick-up in the last few weeks, especially in the tanker segment. We believe that the market may further firm up in the coming weeks, although supply of new ships in the market will continue,” Mr V. Ashok, Director and Chief Financial Officer of Essar Shipping Ports and Logistics Ltd, says.
According to the latest reports, China exported goods worth $119 billion in April, registering a year-on-year growth of 30 per cent, while its imports for the month touched $118 billion, up by about 49 per cent.
The combined value of Chinese imports and exports rose nearly 39 per cent during the month.
VLCC earnings
The earnings per day for a very large crude carrier (VLCC) fell from an average of $49,108 in January this year to $25,908 and $29,491 in February and March respectively.
For most part of April, however, the VLCC rate was over the $40,000 mark, as against an average of $11,421 in April 2009, when recession had clouded the market.
The VLCC earnings had touched its nadir in May 2009, when a carrier earned hardly $3,838 a day.
Dry bulk
On the dry bulk side, the Baltic Dry Index, which measures the cost of transportation of bulk commodities across certain key routes, rose from 2,678 in February to 3,207 in March, while in the last half of April it hovered between 3,203 and 3,359.
performance
In the third quarter of 2009-10, most shipping companies had reported a dip in profits, with earnings from crude and product carriers slipping by almost 70 per cent.
For example, while Great Eastern Shipping reported a 67 per cent drop in net profit at Rs 94.3 crore, Shipping Corporation recorded a 53 per
Indian fertiliser imports, steel production to boost market further.
The VLCC earnings had touched its nadir in May 2009, when a carrier earned hardly $3,838 a day.
Amit Mitra
Hyderabad, May 10
The global freight market gained some torque in the last few weeks, fuelled by increased international oil transportation and more exports and imports by China.
outlook
Shipping companies expect the market to remain at this level and perhaps gain some more traction in the coming weeks.
India's increased import of fertilisers, higher steel production outside of China (mostly Europe) and North America's increased movement of thermal coal and de-icing salt are the other factors that are expected to keep the market steady, especially in the handy size and handy max segments, said analysts.
“We have seen significant freight market pick-up in the last few weeks, especially in the tanker segment. We believe that the market may further firm up in the coming weeks, although supply of new ships in the market will continue,” Mr V. Ashok, Director and Chief Financial Officer of Essar Shipping Ports and Logistics Ltd, says.
According to the latest reports, China exported goods worth $119 billion in April, registering a year-on-year growth of 30 per cent, while its imports for the month touched $118 billion, up by about 49 per cent.
The combined value of Chinese imports and exports rose nearly 39 per cent during the month.
VLCC earnings
The earnings per day for a very large crude carrier (VLCC) fell from an average of $49,108 in January this year to $25,908 and $29,491 in February and March respectively.
For most part of April, however, the VLCC rate was over the $40,000 mark, as against an average of $11,421 in April 2009, when recession had clouded the market.
The VLCC earnings had touched its nadir in May 2009, when a carrier earned hardly $3,838 a day.
Dry bulk
On the dry bulk side, the Baltic Dry Index, which measures the cost of transportation of bulk commodities across certain key routes, rose from 2,678 in February to 3,207 in March, while in the last half of April it hovered between 3,203 and 3,359.
performance
In the third quarter of 2009-10, most shipping companies had reported a dip in profits, with earnings from crude and product carriers slipping by almost 70 per cent.
For example, while Great Eastern Shipping reported a 67 per cent drop in net profit at Rs 94.3 crore, Shipping Corporation recorded a 53 per