RHB Research says 2014 is poised to be a better year for overall freight rates in the shipping industry as demand and supply will be more balanced.
In a note today, the research house said it expects the overall rates to improve by about 35 per cent in financial year 2014 and 25 per cent in financial year 2015.
“Dry freight rates in the spot market have climbed 40-70 per cent in the past 30 days, with Handymax and Supramax seeing strong demand,” it said.
Handymax and Supramax are bulk carriers with a capacity of less than 60,000 deadweight tonnage (dwt).
The six per cent growth in the supply of total tonnage of dry bulk vessels in 2013 is expected to marginally exceed the five per cent growth in tonnage demand, added RHB Research.
However, crude tanker rates remain volatile, with no clear indications of recovering in the near term as overall demand for oil continues to remain weak amid an oversupply of crude tankers, said the research house.
“Tanker rates are expected to remain volatile in 2014 but we see average rates inching up by 15 per cent in 2014 and 25 per cent in 2015 as the stronger demand eases the over-supply,” it added.
RHB Research maintains its “neutral” call for the industry by only rating “buy” on MISC Bhd given its diversified exposure to mitigate the concerns arising from the liquefied natural gas (LNG) segment when the upcoming short-term vessel contracts expire.
“We have seen LNG buyers show hesitation in signing long-term contracts out of fears that LNG prices and shipping costs will get cheaper in the future,” it said.
In addition, RHB Research said the slew of new LNG vessels coming into the market next year would exacerbate the situation and inevitably result in a glut.
In a note today, the research house said it expects the overall rates to improve by about 35 per cent in financial year 2014 and 25 per cent in financial year 2015.
“Dry freight rates in the spot market have climbed 40-70 per cent in the past 30 days, with Handymax and Supramax seeing strong demand,” it said.
Handymax and Supramax are bulk carriers with a capacity of less than 60,000 deadweight tonnage (dwt).
The six per cent growth in the supply of total tonnage of dry bulk vessels in 2013 is expected to marginally exceed the five per cent growth in tonnage demand, added RHB Research.
However, crude tanker rates remain volatile, with no clear indications of recovering in the near term as overall demand for oil continues to remain weak amid an oversupply of crude tankers, said the research house.
“Tanker rates are expected to remain volatile in 2014 but we see average rates inching up by 15 per cent in 2014 and 25 per cent in 2015 as the stronger demand eases the over-supply,” it added.
RHB Research maintains its “neutral” call for the industry by only rating “buy” on MISC Bhd given its diversified exposure to mitigate the concerns arising from the liquefied natural gas (LNG) segment when the upcoming short-term vessel contracts expire.
“We have seen LNG buyers show hesitation in signing long-term contracts out of fears that LNG prices and shipping costs will get cheaper in the future,” it said.
In addition, RHB Research said the slew of new LNG vessels coming into the market next year would exacerbate the situation and inevitably result in a glut.