The average value of the index in April 2013, Clarkson says, was just $9,400 a day, just about equivalent after accounting for inflation to the lowest point of $4,600 a day seen in the 1980s.
Even the seven-year inflation-adjusted average is rapidly heading downwards to match historic lows, Clarkson warns, and this despite the period of record earnings prior to the financial crisis late in 2008. The adjusted seven-year average today stands at $20,900 but it is falling away to the troughs of the low $17,000s seen in the late 1980s and again in 2002.
Spot markets reflect the ongoing tonnage surplus and the significant orderbook suggests there is still more misery to come. According to Clarkson, average spot earnings for VLCCs so far this year work out at just $7,277 a day, barely covering operating costs and certainly making no contribution towards debt service. Meanwhile, capacity equivalent to more than 11% of the existing VLCC fleet – at 619 vessels the largest it has ever been – remains on order.
The picture is similarly depressing in the large bulk carrier sector. There are no less than 250 bulkers of more than 100,000 dwt on order, according to Clarkson, equivalent to just over 17% of the existing fleet in that sector. Meanwhile, average capesize spot rates in the year to date have sunk to $5,600 a day.
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