Charter rates continue upward trend

The charter rates for multipurpose vessels continue to crawl back up from the low levels of June and July this year. Toepfer’s Multipurpose Shipping Index for October shows an increase of 70 dollars to an average day-rate of USD 6,615. 

Over the past three months, the charter rates have crawled up 3.6% since bottoming out at USD 6,831 in June. Compared to January, however, the average rate is still down 10.5%.

Despite the lower rates and predictions of analysts saying that rates won’t recover until the end of 2021, project cargo professionals are optimistic about a recovery. A poll at the Project Cargo Summit 2020 Online showed that 54% of the viewers is optimistic about the near future.

No V-shaped recovery

Speaking at the Project Cargo Summit, BIMCO analyst Peter Sand said that in general, the market for shipping is tough. This means that competition from other shipping sectors, like ro/ro and container shipping, becomes even fiercer, posing an additional threat for multipurpose and breakbulk shipping companies.

With the low oil price and the still low activity in industrial production and global infrastructure, Sand does not expect a V-shaped recovery for the market, as some hoped would happen. It is not all doom and gloom though. “The boom in offshore wind definitely presents an opportunity”, said Sand. “This is something to make use of. Here you can make a distinction between political and economic interest. When it comes to offshore wind, it is mostly driven by politics, so independent of market factors and therefore a strong and upcoming sector.”

Responding to the outcome of the poll, Sand said he’s pleased to see that optimism prevails within the industry.

Author: Tobias Pieffers

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