July Sees Big Jump in Shipping Earnings Index

by Ship & Bunker News Team
Tuesday August 12, 2014

July saw a big increase in shipping earnings, Drewry analysts said today in an emailed statement.

The Drewry All Earnings Index, an average of time charter earnings for dry bulk, tankers, and LPG markets weighted according to estimated market share, increased by 46 percent in July and stood at 191, 59 percent higher than the 3-year average and up 66 percent year-on-year.

Drewry said the index was supported by higher time charter rates in the tanker and LPG sectors, but most markets experienced positive earnings over the period.

Tanker activity and freight rates were said to have increased across all vessel segments on major routes in July, despite escalating conflicts in the Middle East, and the tanker fleet increased capacity to 421.7 million dwt with the delivery of 0.91 million dwt of tonnage.

"Tanker activity went up because refineries returned from maintenance shutdowns in Asia-Pacific," said report author Rahul Sharan.

"In the LPG sector, spot rates for VLGCs on AG-Japan voyages surged again in July to average $132/tonne on the back of increasing exports from the Middle East and high demand from new PDH plants in China."

However the index was held back by an unsettled dry bulk market.

"The Capesize market was unable to retain the glory of the previous month, but the Panamax market rebounded as grain trade picked up. The demolition market remained volatile because of Eid celebrations in Pakistan, Bangladesh and India," said Sharan.

The index reached a four-year high of 310 in December 2013 on the back of a strong recovery in time charter rates across all sectors.