Spot freight rates in the key tanker segment have skyrocketed in the last fortnight due to the chilly winter in North America and Europe.
According to senior shipping company executives, there is a strong demand for tankers from the western refiners for transporting crude oil from West Asia to their facilities in anticipation of a strong demand for petroleum products during winter.
The Indian shipping companies have an overwhelming capacity in the tanker segment and the increased demand is expected to help them in getting better realisations.
The spot freight rates in the VLCC (very large crude carriers) segment are $141,505 a day, compared with the average spot freight rate of $24,938 in November 2007, point out analysts.
The VLCC carriers are used to transport crude oil from West Asia to the western refiners. The average spot freight in this segment was $15,226 a day in the September 2007 quarter.
In other tanker segments such as Suezmax, the current spot freight rate is $88,375 a day compared with the average spot freight rate of $14,099 a day in the September 2007 quarter.
Meanwhile, in the dry bulk segment, freight rates continue to be strong, thanks to the booming Chinese demand for commodities. The Baltic Dry index is currently at 9,949 compared with the average level of 7,348 in the September 2007 quarter.
An improved operating environment for this sector has not gone unnoticed by the street. GE Shipping touched a 52-week high of Rs 537 on Monday. Similarly, Varun Shipping hit a yearly high of Rs 90.45 during intra-day trade on Monday.
Source - Business Standard
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