Increased Vessel Speeds will Cap Dry Bulk Freight Rates
AS slow steaming becomes less attractive, the supply-demand balance is likely to remain fragile, capping freight rates in the dry bulk sector.
According to MANA, pioneer Marine chief executive Pankaj Khanna noted during the company's first-quarter earnings statement that as freight rates rose, fleet speed became a consideration.
Vessel speeds were rising from the 12 knots they have been trading at for most of the last two to three years, resulting in increased availability on more rapidly completed voyages and thus capping freight rates, Mr Khanna said.
Slow steaming has had a significant impact over the last couple of years. As vessels reduced speeds, taking longer to complete voyages, they became less available to carry cargoes and thereby ensured continued demand from charterers.
“Asset prices (like shipping stocks) are now driven by the market sentiments that expect further improvement in freight rates over the next year or two,” he added.
Mr Khanna pointed out that the demand-supply equation looked better now than it had been in the past three years.
However, he believed that the threat of newbuilding ordering remained.
Singapore-based Pioneer Marine reported a narrower loss of $4.9m in the first quarter of 2017 as compared with a $13.9m loss in the same period a year ago.
Time charter equivalent revenues improved to $10m for the period, up from $4.9m the year before, mainly due to deliveries of two vessels in the final quarter of 2016 and the stronger market in 2017.
Vessel operating expenses for the three-month period amounted to $4,997 per day, versus $4,533 per day in the previous-year period.
The Norway-listed owner has a fleet of one supramax, one handymax and 14 handysize bulk carriers
Vessel speeds were rising from the 12 knots they have been trading at for most of the last two to three years, resulting in increased availability on more rapidly completed voyages and thus capping freight rates, Mr Khanna said.
Slow steaming has had a significant impact over the last couple of years. As vessels reduced speeds, taking longer to complete voyages, they became less available to carry cargoes and thereby ensured continued demand from charterers.
“Asset prices (like shipping stocks) are now driven by the market sentiments that expect further improvement in freight rates over the next year or two,” he added.
Mr Khanna pointed out that the demand-supply equation looked better now than it had been in the past three years.
However, he believed that the threat of newbuilding ordering remained.
Singapore-based Pioneer Marine reported a narrower loss of $4.9m in the first quarter of 2017 as compared with a $13.9m loss in the same period a year ago.
Time charter equivalent revenues improved to $10m for the period, up from $4.9m the year before, mainly due to deliveries of two vessels in the final quarter of 2016 and the stronger market in 2017.
Vessel operating expenses for the three-month period amounted to $4,997 per day, versus $4,533 per day in the previous-year period.
The Norway-listed owner has a fleet of one supramax, one handymax and 14 handysize bulk carriers