Dry bulk freight rates likely to remain weak: ICICIdirect

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

14 Nov 2011

``In the near term, dry bulk freight rates are expected to remain weak owing to expected weakness in rates of capesize vessels owing to lower demand due to high level

of Chinese iron ore inventory. Over the longer term, excess supply of tonnage would keep tabs on the up move in the freight rates,`` said broking firm ICICIdirect while commenting on the outlook of bulk freight rates. It further said the following:
Tankers: Crude oil tanker freight rates are expected to remain subdued owing to the oversupply of tonnage, which would handicap the market. Even if some demand emerges in the near term, the tonnage available is likely to weigh on the charter rates and keep them subdued. Some positive momentum is likely for VLCCs while Suezmax day rates are expected to remain rangebound with a positive bias.
LPG carriers: LPG freight rates are expected to remain weak particularly for VLGC and LGC while MGC freight rates are expected to remain flattish. Smaller vessels could face downward pressure in freight rates owing to a large proportion of vessels being added to the global fleet in 2011.
Offshore vessels: Utilization levels for offshore vessels are expected to increase while charter rates are expected to remain range-bound with a positive bias in November 2011. High capex spend by major global oil exploration/drilling companies is likely to lead to higher utilization levels for offshore vessels.
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Source: IRIS