Toepfer Transport: war in Ukraine keeping MPP rate levels robust

Toepfer Transport: war in Ukraine keeping MPP rate levels robust

The worsened outlook for the world economy and the uncertainty caused by the war in Ukraine has pushed aside the euphoria in the MPP sector and replaced it with caution. Despite this sentiment, Toepfer Transport’s Multipurpose Index for the month of April 2022 saw an increase. 

The Hamburg-based shipbroker reported a TMI value of $22,764, a 2.2 percent increase from the previous month. This is also a jump of 181.1 percent compared to April 2021. However, looking ahead six months, Toepfer expects the Index to edge downwards 1.93 percent while it is expected to slip further 11.76 percent over the 12-month period.

Toepfer Transport: war in Ukraine keeping MPP rate levels robust
Photo source: Toepfer Transport

“The time charter rate levels are robust but due to continued uncertainty caused by the Ukraine war and the worsened outlook for the world economy, the euphoria which reigned not only in the MPP sector has given way to a more cautious approach in general, which is reflected in the forward TMI-P6 and TMI-P12 assessments,” the shipbroker noted in its latest monthly report.

The container market, one of the key indicators for the MPP demand spike, is losing momentum with a lower number of fixtures but still extraordinary rate levels. With ongoing supply chain hurdles in China due to COVID lockdowns, Toepfer Transport does not expect this to change anytime soon.

Rising material prices and supply bottlenecks have led to another upward push to newbuilding prices in Asia while second-hand prices for MPP vessels stay steady on high level.

The demand for tonnage in the MPP sector is unbroken and fundamental as the global energy transition can be expected to accelerate much further with the essential need particularly in the EU to become independent from Russia’s fossil resources.

Author: Adnan Bajic

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