Toepfer Transport: MPP charter rates slip as demand falters

Charter rates have come under pressure recently due to a drop in demand from the traditional breakbulk/neobulk market, Toepfer Transport notes in its monthly report.

The shipbroker assesses the charter rates in the MPP sector for the first month of 2023 will land at $15.900, slipping 10.81 percent from the previous month. Toepfer Transport expects its index to slip a further 1.69 percent in the following six months with a twelve-month drop expected to be at around 4.51 percent. Compared to January 2022, when TMI stood at $20,875, January 2023 figures are 23.83 percent down.

Commenting on the market trends, Toepfer Transport analysts say, "While most market stakeholders expect the demand for MPP cargo space to increase rapidly later this year, it is yet unclear when exactly all the expected O&G and renewables projects finally will be shipped."

These uncertainties are flanked by the high amount of Covid-19 infections in China which may have some impact on the steel markets, the production of various goods and on the reliability of port operations, the report says.

"The situation was clearly reflected in the assessments our panelists made for the TMI-P6 and TMI-P12. While some panelists expect the rates to rise in the upcoming months, some others expect the rates to fall. Only time can tell us who is right," Toepfer Transport analysts say.