NEW DELHI: Movement of dry bulk commodities on the Persian Gulf-to-India route has increased in the first quarter of 2017, compared with Q1 2016, on account of increased demand from Indian customers.
The spot dry bulk freight orders, tracked by S&P Global Platts, to move limestone, dolomite and gypsum among other cargoes on the Persian Gulf-to-India route, have increased 25% in Q1 2017 from Q1 2016.
Platts has recorded 39 spot orders to move dry bulk cargoes between January and March this year, versus 31 cargoes last year. Indian steel makers like Tata Steel, JSW Steel, JSPL and Bhushan Steel were among the most active charterers, in addition to cement producers and traders.
The spike in demand has also seen the freight rate to move 50,000 mt(plus/minus 10%) of limestone from Mina Saqr to Paradip peak at $10.30/mt on March 15, which was the highest level registered since the launch of the assessment on June 1, 2016.
The freight rates for Supramax-class vessels that are looking for employment in the Indian Ocean region have been staying firm for a while now, which market sources attributed to a confluence of factors.
“The Persian Gulf-to-India [route] is currently a different market for the Supramaxes,” said a ship-operator source, adding that imports of limestone into India have increased significantly owing to increased steel production.
The April 2016-February 2017 period saw crude steel production burgeoning to 89.082 million mt, a growth of 9.3% over that in April 2015-February 2016, according to data from the Steel Ministry’s Joint Plant Committee.
The import of finished steel has dropped 38.5% to 6.59 million mt in April 2016-February 2017 from that in April 2015-February 2016.
The ship-operating source added that the steel prices in India have been better supported as imports have dwindled after various import duties were levied by the Government over the past year.
Also helping the demand for the Supramax segment in the Indian Ocean market were the outbound cargoes from India, which are seeing an increase in the exports of iron ore, salt and bauxite.