The Drewry Multipurpose Time Charter Index remained static over April at $11,170 per day, as the previous month’s decline was halted. “We had expected a slight softening but rates were held up by China’s Covid lockdowns and extended Easter holidays in Europe. Going forward we expect the weakening trend to return in May with the Index dropping, albeit by less than 0.5% to $11,120 per day.
April has been characterised by a wait and see approach from shippers as various Easter holidays produced a month of stop-start activity. Add to this the impact of Chinese lockdowns on both port operations and manufacturing output, the ongoing conflict in Ukraine taking the Black Sea market to new depths and sky-high fuel prices.
Going forward into May and the likelihood is the pent-up demand in China should support the longer haul, heavy lift sector, however will that be released in time to affect this month’s spot rates? We think that is unlikely and container rates will continue to soften. The driving factor for the MPV market over the last 12 months has been the spill over cargo from the container sector, whether that is containers themselves or commodities that have moved back to breakbulk.
Over the next month our view is that ongoing weakness in the Handy sector will help to keep spot rate rises subdued, as they add to the competition for breakbulk cargo, however we may see renewed rate growth over the summer as China comes back online.