Drewry Index Drops in August

by Ship & Bunker News Team
Monday September 15, 2014

Drewry's All Earnings Index, covering the main bulk shipping markets, dropped 20 percent in August after a jump in July, according to an emailed press release from the shipping consultancy.

Tanker and liquefied petroleum gas (LPG) charter rates fell significantly, while the dry bulk sectors experienced some recovery.

The rapid changes in the index, which averages time charter earnings for the bulk sectors, weighted by market share, indicate the shipping market's volatility.

A decline in crude demand in the U.S. and Europe pushed down freight rates for dirty tankers, while low demand in Asia reduced LPG rates.

Meanwhile, higher demand for iron ore and coal increased the need for Supramaxes and Panamaxes on Pacific routes.

"The tanker market is expected to remain volatile in September, as strong demand for crude in Asia-Pacific supports the market, while refinery shut-downs in Europe act as a dampener," said report author Rahul Sharan.

"The tanker market may suffer further if escalating violence in Iraq and threats of increased sanctions on Russia lead to supply disruptions."

The index's level of 152 in August was 50 percent higher than one year previous and 24 percent above the three-year average, though far below its level of 310 in December 2013, when it reached a four-year high.

The index rose 46 percent in July, driven by the tanker and LPG sectors.

Ship & Bunker News Team
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