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.
Drewry’s latest assessment
The Drewry Multipurpose Time Charter Index increased to $10,487 per day in November, representing a rise of just 1.9% compared to the 2.5% rise seen in the previous month, as the continued capacity constraints kept the spot market demand high but the competing sectors both reported weaker charter rates. Drewry’s Index is up 63% since the start of the year and 69% since November 2020. Drewry expects the index to rise a further 1.1% in December to reach $10,600 per day.
The slowing pace of Drewry’s Index is largely attributable to weaker growth in both the container and bulk sectors over November, subduing rates particularly in the shortsea market. Both competing sectors reported spot rate decreases (from record highs), which corresponded to a plateauing of MPV rates. However demand remains firm in both the short-sea and longer haul project cargo sectors as supply constraints continue.
For the former, demand remains steady but is expected to weaken towards the year end due to the impending holiday season. For the project carrier sector demand remains high for the medium term particularly, around a resurgence in confidence for oil & gas projects due to the strengthening oil price and scarcity of LNG over 2021. Add to this the continued demand from the renewable sector and the market may be slowing but it is unlikely to weaken significantly in the medium term at least.