Tanker freights dip on winter blues

Business Standard, Mumbai
The average spot freight rates in the tanker segment have eased substantially in the December 2006 quarter on a year-on-year basis. For instance, in the VLCC (very large crude carrier) segment, the average spot freight rate was $33,185 a day in the December 2006 quarter compared with $73,427 a day in the December 2005 quarter. Domestic players such as GE Shipping, Varun Shipping and Shipping Corporation of India have a major part of their fleet in the tanker segment. These ships are typically used for transporting crude oil from the Middle East to refiners across the globe. Analysts pointed out that an unusually warm winter this year in the northern hemisphere, coupled with refiners in the Western countries stocked with adequate supplies of crude oil for the winter, has led to a sluggish demand for tankers. Meanwhile, in the other tanker segments, such as the Suezmax (ships used to transport products for relatively shorter journeys), the average spot freight rate was $35,425 a day in the third quarter of the financial year compared with $ 63,397 a day during the same period last year. However, in the dry bulk segment, a strong demand from the Chinese steel industry for transporting raw materials and finished steel exports has led the Baltic Dry Index to average the 4,161 levels in the December 2006 quarter as compared with the 2,937 levels in the same period last year.