Despite the coronavirus, a very low Baltic Dry Index and problems at Zeamarine, charter rates for multipurpose and heavy-lift vessels so far seem to remain stable, according to Toepfer’s Multipurpose Shipping Index. 

Toepfer’s Multipurpose Index measures the average daily of a standard 12,500 dwt MPV/HL vessel. Mid-February the index stands at an average daily charter rate of USD 7.385, which is only USD 8 below the average rate recorded in January. In comparison with December, the index has dropped USD 169 but this difference is also attributable to traditional seasonality. The first quarter is always much slower than the fourth following the holidays and including the Chinese new year break.

Uncertainty

If and how the rates will be affected by the coronavirus over the next few weeks is uncertain but with other sectors heavily impacted, the industry should prepare itself for fiercer competition, Drewry’s Multipurpose & Breakbulk Shipping Susan Oatway told PCJ last week.

“There is no way of knowing the full impact of the coronavirus without having a view on its longevity”, she said. “In the worst case, the disruption to the supply chain will be huge, particularly for those sectors with no viable alternative sources such as electronics, household appliances and auto parts. If it is short-lived the pent up demand should be strong and China, in our opinion, will do its best to prop up growth via fiscal stimulus. In the meantime, as industrial production slows carriers are having to scale back capacity sharply. For the MPV/HL sector, the effect on the container and bulk carriers will have a significant effect due to the increased competition for commodity demand.”