Freight rates expected to remain muted: ICICI Sec

Broking firm ICICI Securities said in the last one month, tanker freight rates reported a sharp drop with rates for Suezmax and Aframax carriers declining by 34% to USD 10,237 and 21% to USD 10,331, respectively. VLCC carriers freight rates declined sharply by 58% to USD 12,358 over the same period Dry bulk freight rates also reported a sharp fall in July while benchmark index (BDI) corrected by 18% during July 2010. Capesize vessel rates corrected by 56% while rates for mid-sized Panamax vessels corrected by 28%. The correction in vessel rates of smaller vessels was lower with 22% and 6% for Supramax and Handysize vessels, respectively, it added.
Going forward, it expects freight rates expected to remain muted.
The outlook for freight indices is given below:
Dry bulkers: Dry bulk freight rates are expected to  firm up in August after the recent drop on the back of higher volume of shipments by China. Over the longer term, we expect BDI to remain within a range of 500 to 1000 points as the upside appears to be capped by a huge supply of vessels expected to join the global fleet in the next two years.
Tankers: Crude oil tanker freight rates are likely to remain muted in August on account of lower demand and drop in crude oil shipments. The recovery in product carrier rates is expected to continue in August.
LPG carriers: LPG rates for VLGC and LGC are expected to rise while rates for MGC are likely to remain firm in August.