The maritime news section of the archived blog mixed market analysis with reports from yards, owners and regulators. This page leads with its best-known item, a forecast for dry bulk rates, and adds the tanker outlook.
Bulk carrier rates
Citing the Oslo-based bank RS Platou Markets, a Bloomberg report said rates for ships carrying minerals and grains could climb almost threefold by 2015, as demand grew faster than supply.
Capesize. Earnings for the largest ships, which carry about 90 percent of traded iron ore, were forecast to rise 16 percent to average USD 11,000 a day in 2013, then USD 19,000 in 2014 and USD 30,000 in 2015. Demand was expected to grow 7.3 percent in 2013, close to the 7.5 percent of fleet growth, with slowing fleet growth creating upside in the second half.
Panamax. Panamaxes, which carry more than half of the world’s coal, were seen gaining 5.9 percent to about USD 9,000 daily in 2013 and USD 13,000 the following year. Total bulk demand growth was projected at 7.6 percent next year against 3.3 percent fleet growth.
Background. The Baltic Dry Index averaged its lowest in 26 years in 2012 as the fleet grew 10 percent to 679 million deadweight tons. On the day of the report it stood at 745, 16 percent above the 26-year low of 644 set on 1 February 2012. Daily rates were around USD 7,316 for Capesize, USD 5,176 for Panamax, USD 7,120 for Supramax and USD 6,632 for Handysize. The world fleet of 9,490 bulk carriers moved more than 4 billion tonnes of cargo in 2012, including 1.1 billion tonnes of ore and 1 billion tonnes of coal.
Tankers
A June 2013 report from Drewry described a tanker market still burdened by surplus capacity. Oil demand fell 1.0 percent in the first quarter to 89.9 million barrels a day, and about 46 million dwt had been added since 2010, with another 17.1 million dwt due that year. Drewry expected no recovery in freight rates in the short term but some improvement from 2014, helped by a slowdown in ordering and longer voyages as crude flows move towards Asian refineries. It forecast demand growing about 5 percent a year through 2018, but warned that cheap newbuild prices could trigger excessive ordering.
Reading the numbers
Daily earnings quoted in a forecast are averages, so a single day can look very different. The report itself shows this: spot rates on the day it was written were well below the average forecast for the year. Three points stand out. First, fleet growth had slowed from 17 percent in 2010 and 15 percent in 2011 to 10 percent in 2012, which supports firmer rates. Second, demand had to keep pace for the forecast to hold. Third, forecasts of this kind depend on owners not ordering too many new ships, which is the same caution Drewry raised for tankers.
Why crewing readers care
Freight rates drive owners’ budgets, including how many ships operate and how much they invest in training and manning. A recovery in bulk rates would tend to increase demand for experienced officers, while a prolonged slump in tankers works the other way. The crew management overview explains how agencies plan around such cycles.
Other topics in this section
Beyond market reports, the blog reposted items about ports, LNG terminals, offshore vessel orders, safety guidelines and casualty updates, nearly all credited to trade news sources. The tone is that of a clipping service kept by a crewing agency to stay informed about the industry its seafarers work in.
Shipbuilding and policy
The section also followed deliveries and orders. See the monthly roundups for May, June and July 2013, and the crew management news for the human side.