SIW1106The Clarksea Index (a weighted average of bulker, tanker, gas carrier and containership earnings) averaged $13,468/day in Q4 2013 and $16,492/day in December. This looked fairly healthy compared to the full year 2013 average level of $10,368/day. The late 2013 uplift was partly down to an improved performance in the Capesize market, with many observers noting the seasonal trend in vessel earnings.

Reasons For Seasons

So, should we expect the Clarksea Index to follow a seasonal pattern? Well, there are many reasons why this could be the case. In bulk, mining output tends to be impeded more greatly by weather in the rainy season, and the South American grain season still plays a role. The US driving season is often referenced as a factor in oil product demand levels, and more broadly the severity of the northern hemisphere winter has an impact on demand for energy shipping. In the containership sector, earnings are often bolstered in the spring, as operators try to access tonnage in advance of the peak retail shipping season in the summer and early autumn.

Seasonal Pattern

But do the statistics show a seasonal influence? The graph shows the monthly average ClarkSea Index for the last three years and the average ‘seasonality’ over the last 20 years, expressed for each calendar month as the average percentage of the annual average in each year

In Q4 2013, the Clarksea Index was 30% above the annual average (and 59% above it in December). Yet in Q4 2012 there was basically no seasonal uplift, and just 3% in Q4 2011. However, over the last 20 years, on average the Q4 index level has been 5% above the annual average. So, there is a pattern of seasonal uplift in Q4, even if 2013 appears to have been an extreme case.

Changing of the Seasons

On the other hand, apart from the potential for a stronger Q4, the his-torical trend isn’t particularly clear. Nothing stands out although the summer period looks to be on aver-age weaker than the annual average levels. Moreover, some years are much more volatile than others. On average across the 20 years the average deviation of the 12 months across a year from the annual aver-age was 11%, but with a high of 28% in 2008 and a low of 2% in 1995.

What does this all tell us? Well, over the long-term there are some seasonal patterns in overall vessel earnings, and late 2013 clearly saw a ‘typical’ seasonal uplift in the ClarkSea Index for the first time in four years. This could well be an encouraging signal. 2014 has started well with an average ClarkSea Index in the first three weeks of $15,267/day, even if some of this has been due to micro factors such as weather-related de-lays. On the other hand, it remains the fact that the health of the shipping markets is a complex matter, and will remain subject not just to seasonal trends, but to a wide range of factors, short-term and long. Have a nice day.

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