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Multipurpose Time Charter Index – Oct 22

The Drewry Multipurpose Time Charter Index tracks one-year period charter rates across a basket of vessel types and sizes and forecasts the market movement over the coming month. The vessel types include breakbulk and project cargo ships.

The Drewry Multipurpose Time Charter Index continued the decline over September at a much faster rate than predicted. Spot rates in both the container and bulk sectors lost between 10% and 30% of their value over the month, taking MPV Charter rates down with them. Our analysis of various reports suggests rates fell over our basket of vessels by some 5.4% taking the index to an average $10,075 per day. Our prediction for October is more of the same, with increasing global uncertainty, small shifts in demand will weaken the market further, with the index likely to decline by a further 5% over the coming month.

Drewry’s latest assessment

Over September Handy bulk rates softened as tonnage availability increased, while container rates practically fell off the cliff, losing in excess of 30% of their value. Although there are still pockets of congestion, in the main this is easing, while bunker prices are also lower. Rates are still at historically high levels but a realignment has begun in earnest as the container carriers assess their utilisation and demand weakens with rising concerns about inflation, energy prices and geopolitical uncertainty.

Going forward we expect rates to continue to weaken, although remaining well above the market levels of 2020. The rising risk of recession in a number of developed countries, high inflation in the US and the slowing housing market in China are all adding to the increasing uncertainty for this sector. The main positive on the horizon is renewables cargoes, particularly for wind energy. But this is very niche, for heavylift capable vessels only, so will not be enough to stem the downward trend.

Related Research: Multipurpose Shipping Sector

For access to the latest charter rates and forecasts across a range of multipurpose vessel types subscribe to Drewry’s Multipurpose Forecaster. Published quarterly it provides 5-year forecasts and market updates for the global Breakbulk and Heavy Lift shipping markets, together with supplementary monthly updates of the latest market developments, including charter rates and asset values.

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