The Hindu Business Line : SCI mulls laying up bulk carriers on Baltic index fall

A sharp drop in Baltic Dry Index, from more than 1,100 in the middle of May to 663 on last Friday, has led Shipping Corporation of India (SCI) to mull laying up its bulk carriers, at least some of them.

Lok Maheswari, a 26,000-dwt handymax, has already been laid up in a Gujarat port after the vessel recently completed her voyage from Indonesia to Tuticorin carrying coal. This is the first bulk carrier that SCI has laid up.

“The situation has come to such a pass that we can save on costs if we lay up ships instead of sending them for dry docking”, observe SCI sources. SCI has a total of 20 bulk carriers – 17 handymax and three handysize with a total tonnage of about 8,35,000 dwt. and the freight for a handymax has now dropped to around $3,000 a day from more than $30,000 a day a few months ago.

Some of SCI’s bulk carriers are on contract of affreightment with Steel Authority of India for importing coal from Australia. Earlier, these vessels used to carry iron ore exports to China and from there they would go to Australia.

Since exports to China have sharply declined, the vessels are now going to Australia in ballast. Worse, the steel industry being in a bad shape, the coal import from Australia too has declined.

Fortunately for SCI, the tankers are providing the cushion. More than 70 per cent of the shipping line’s fleet comprises tankers totalling 3.5 million dwt, mostly crude tankers.

The tanker market too is down but not as badly hit as the bulk carrier market.

After all crude movement has to take place, particularly during this time of the year. More important, the crude prices having slumped, the cost of bunkering too has come down.

Meanwhile, the report that a Capesize (capacity 80,000 dwt plus) has been fixed at around $1,000 a day has sent shock waves in shipping circle. “We’ve no Capesize vessel”, add the sources.

More Stories on : Shipping/Ports | Shipping Corporation of India Ltd

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Fog delays 19 flights

Global airlines may cut losses by half, fares by 5% in 2009: IATA

SCI mulls laying up bulk carriers on Baltic index fall

Valuation disputes may hurt Mumbai port use

Karnataka to introduce smartcards for driving licence, RC