SIW1088As the end of the third quarter nears, it’s a good time to assess the progress of the shipping markets in the year to date. The Clarksea Index last week stood at $10,292/day, only $600/day off its end 2012 figure, despite a dip down as low as $7,500/day in February. Has this been a year of treading water?

What Are You Earning?

The answer is not really. The overall picture hides a range of differing trends across the various sectors of the market. The Graph of the Week shows the year-on-year change in earnings for a range of ship types, comparing the average for January-August 2013 against that for the first eight months of 2012. Spot earnings have been used where possible; elsewhere the shortest-term available period rate has been used instead.

What’s Up?

Supported by a recent rally, Capesize bulkers have seen the largest gains on a y-o-y basis, with average earnings reaching above $25,000/day last week. This is the third year in a row that late August has brought pre-Chinese Golden Week impetus to the Cape market, but Australian export growth, combined with lower deliveries (projected to be down c.40% this year) may also be starting to have an impact on the oversupply. Rates for smaller bulkers, however, are lower y-o-y, with heavy contracting in 2010 now affecting fleet expansion.

Wet Through

In tankers, it’s a story of two markets, with products earnings up on 2012, but those for crude tankers down. Crude demand has been hampered by the decline in US imports, combined with softer Chinese imports (just 5mbpd in August). Sentiment is more positive for products, however. Earnings for all sizes are up y-o-y (in the case of the MRs, by 60%) and general expectation seems to be for further improvement through the winter.

On the Gas

Spot earnings for LPG ships are little changed y-o-y. This, however, conceals more of a rollercoaster ride, where earnings have ranged from sub-breakeven levels in Q1 to above $50,000/day more recently. The containership market remains affected by the weakness of developed economies, which has required the cascading of larger boxships onto trades previously the home of charter market tonnage. This year rates have only ticked up marginally for some sizes.

Heading Off?

A number of traditional ship owners have looked to offshore as a way to avoid the shipping downturn. Rates for AHTS/PSVs and drill rigs have improved y-o-y (these are tracked in Offshore Intelligence Monthly). As offshore drilling continues to move to deeper waters, there could be further opportunities for canny investors.

So, although the Clarksea Index now seems marooned around $10,000/day, there have been serious fluctuations. Potential opportunities exist, both within the mainstream sectors, and in more niche areas. Have a nice day.