ESSAR SHIPPING Net
Profit increses by 463% for 3QFY2001. Reports Net Profit
of Rs. 505.4 million (US$ 10.77 million)for the 9-Month
period ended 31st December 2000
The Company’s strong presence
in the Suezmax tanker market drives its profitability.
The World Scale (WS) rate for such vessels has been scaling
record highs. During the quarter under review the WS rates
for Suezmaxes improved from 190 in September to 233 in
end-December. Spot market rates for such vessels are in
the range of US$ 65-70,000/- per day. One year time charter
rates range around US$ 40,000/- per day.
The tanker market
has seen unprecedented heights in the last quarter with
the World Scale touching 233 by the end of the quarter,
for the WAF-US sector. This translates roughly to a time-charter
yield of US$ 69,000/- per day.
The UN and Iraq are negotiating
(1) the Iraqi $0.50/bbl surcharge and (2) the pricing mechanism
for the new 6-month oil-for-food deal which started on
6th December. This is expected to be resolved quickly.
The ability of this sector to adapt to the temporary loss
of one of its key markets once again shows its flexibility.
This, allied with continued fleet stability, will ensure
that earnings will remain very healthy through 2001. Hence,
although rates are vulnerable to a short-term reduction
in oil supplies, MSI anticipates that average earnings
will close to the US$ 40,000/- per day barrier over the
next six months with the potential for its increase.
Many
analysts feel that the bulk carrier market, especially
the Capesize market, to ease off its current levels of
charter hire of US$ 20,000/- per day for modern Capesize
vessels, over the next six months. The handy-size/handy-max
market is also projected to follow the Capesize market
and settle at around US$ 8,500/- per day charter hire
for modern vessels.
CORPORATE