Hyderabad: "All's well that ends well". Indian shipping companies are trying to draw some cold comfort from the title of this Shakespeare's play, as the last quarter of 2011-12 saw global freight rates gaining traction, especially in the tanker segment.
This brought some cheer to ship owners, who had to put up with a feeble freight market for the whole of the fiscal.
To stay firmer
They expect the rates to sail on this relatively firmer note in the coming months.
Analysts feel that tanker rates will continue to inch up in the next few months, with uncertainties over Iran crude supplies prompting refineries to stock up additional stocks and new refineries going in for Latin American crude, involving long-haul shipments.
Stable freight rates
"We feel that the tough times are receding. We are seeing more fixtures on the global chart that may keep freight rates stable in the coming months," Mr A.R. Ramakrishnan , Essar Shipping Managing Director, told Business Line.
For the first time during the fiscal, the daily charter rate for a very large crude carrier (VLCC) breached the $20,000-mark in the last few days of March 2012. In fact, the year started with VLCC rates averaging about $550 a day in April 2011 and hovering between $3,000 and $5,000 a day between August and December.
In the first week of this month, the rate ruled at over $24,000 a day.
With the new refineries in India, such as those of Reliance and Essar, designed to crack dirtier crude, these companies are now bringing in crude from Latin American countries despite the longer haul.
"While shipping crude from Middle East to India could take three to four days, hauling it from Latin America would take between 30 and 40 days.
Such long hauls tend to nudge up tanker rates," Mr Ramakrishnan said.
The Baltic Dry Index, which tumbled to below 600 in February 2012 for the first time in two decades, crawled up to 900 in the second half of last month, as Chinese import of raw materials picked up.