Even though there was a slight uptick in shipping freight rates for bulk cargoes in the last few weeks, ship owners do not see this as any significant relief to the pressures on their margins.

Industry captains feel that the marginal hardening of rates was on account of some increased charters from China and other temporary factors. They feel that the squeeze on their margins would continue, as freight rates would remain tame for the rest of 2013.

“One should not read much into this (slight increase in rates). Capesize vessels are still not getting more than $5,000-6,000 and the Panamax rates hovering between $6,000 and $8,000 a day,” said A.R. Ramakrishnan, MD of Essar shipping.

An assimilation of spot rates reveals that the Baltic Dry Index, which measures cost of shipping bulk commodities, inched up from an average of 745 in February to 876 in March. In fact, in the beginning of April, it breached the 900 mark.

Similarly, the Baltic Panamax Index crawled up from an average of 807 in February to 1147 in March, even crossing 200 on some days. However, the rates for the larger capsize vessels did not see much increase and were more or less steady.

“Rates in the Atlantic for Panamax class remained reasonably well supported. The firm rates have drawn away some tonnage from Pacific, limiting number of ships for shorter round voyages via Indonesia to India and Japan. This led to a slight increase in transpacific trip rates,” a Clarksons Research report said in the last week of March.

Tanker rates, however, did not see even this kind of increase, with the daily VLCC (very large crude carrier) rates still hovering below $4,000.

Shipping companies attribute the depressed market conditions to continuing over supply of new vessels in the market. “Estimates have it that 40 per cent surplus tonnage is floating in the market today. Even a 20 per cent excess tonnage will have an impact on freight rates,” Ramakrishnan said.

amitmitra@thehindu.co.in

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