The UK-based shipping consultancy Drewry reported a slowdown in the rise of time charter rates, lifting its Multipurpose Time Charter Index by 1.4 percent. 

The index was lifted from $8,934 per day in June to $9,056 per day in July. To remind, Drewry’s index rose 7.1 percent during the previous month. Drewry’s Index is up 39 percent since the start of the year and 59 percent since July 2020. Drewry expects the index to rise a further 1.6 percent in August to reach $9,200 per day.

MPV rates rise eases

The relentless rise in time charter rates in the MPV sector slowed slightly over July. The Index is weighted as per vessel numbers and therefore the shortsea sector has a slightly disproportionate effect. Rates in this sector slowed significantly with rates staying flat compared to the last time of reporting, whereas for the project carriers there was growth of just 1.4 percent. This was mainly due to a softening of demand in Northern Europe for the smaller shortsea vessels, whereas the larger project carriers were still picking up cargoes due to the continued supply constraints in the container sector.

This softer demand for the smaller vessels is expected to continue over the northern hemisphere summer, but is likely to be relatively short-lived. However for the larger, more heavylift capable vessels, the supply constraints in the competing sectors, in particular containers, mean that demand is expected to remain high to the end of the year. Most owners are reporting being fully fixed through to September, making the spot market particularly hard to call, and many are benefiting from both breakbulk cargoes moving out of containers and project cargo needing space. Our expectation for the Index is therefore for slower but steady growth through August.