Tuesday, October 08,
Global freight rates, both in the tanker and dry bulk segments, continued their downward journey, forcing ship owners to keep a slice of their fleet idle as the rates at times did not even cover the operating costs, the whole of last month.
Shipping analysts feel the dry bulk segment is unlikely to post any significant recovery, especially with Chinese steel production slated to be cut.
The Baltic Dry Index hovered between 2,737 and 2,446 in September, after touching a high of 3836 in May this year. “Weakness in the dry bulk freight rates is expected to continue in October. We remain cautious as steel production in China continues to be moderate, which would necessitate a drop in Iron ore inventory levels,” a latest report by ICICI Securities says.
The report further points out those new building orders for dry bulk vessels declined from 93 to 68, in September. Analysts feel that in the long run, the new building orders may keep freight rates subdued.
Source: The Business Line
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