The Multi-purpose Vessel (MPV) charter rates have sunk further, with the Toepfer’s multipurpose Index (TMI) reporting a dip to USD 12,208. The rate index is just a shade higher than the 5-year moving average of USD 12,177. While newbuilding activities in the sector are thin, with concentrated pockets to achieve carbon-neutrality, the high vessel utilization levels which have kept MPV charter rates above pre-covid levels, has encouraged some owners back to the newbuild market.
The current newbuilding orderbook activity stands at 2.4 million DWT. Toepfer’s commentary on the rate action for the month said “ The delay of various projects and the non-appearance of the well expected surge in demand for cargo space from the wind power sector as well as the low activity in the minor bulk markets have blurred the optimism. The TMI-P indicates that the outlook for the market is more positive than it was in the past months. The increase of newbuilding ordering activity and the time charter rates agreed for these newly ordered ships indicate quite some positive sentiment in the long term.”
It must be noted that the Toepfer’s outlook for Q4, 2023 released earlier this September, spoke of a sideways rate movement with marginal gains in November and a marginal dip in December. In spite of all these we did see the Market Sentiment Index (MSI) at a low for the quarter, owing to the subdued pickup in demand. Despite the TMI reporting its lowest quote since August 2021, analysts are of the view that 2024 could see some uptick with a horde of projects starting/ restarting.
The Drewry Multipurpose Time Charter Index, a fleet weighted average of the day rates of three vessel size bands: 5,000-7500 Ton dwt, 10,000-15,000 Ton dwt and 15,000-20,000 Ton dwt though, recorded yet another marginal gain for the month to end at USD 8,640, in line with the agency’s predictions. Given that the winter beckons more activity in the energy and infrastructure space, as part of the seasonal offerings of demand, there is a slight pick-up predicted based on Drewry commentary.
Author of the article: Gautham Krishnan
Gautham Krishnan is a logistics professional with Fluor Corporation, in the area of project logistics and analytics, and has worked in the areas of Project Management, Business Development and Government Consulting. He has been bestowed the AntwerpXL 40-under-40 award for the year 2023, as one of the upcoming, future leaders in the project logistics space.