Time charter rates in the multipurpose shipping sector have dropped even further over the last month, according to shipbroker Toepfer Transport.

The average daily time charter rate for a 12,500 dwt/F-type heavy lift vessel stands at USD6,863 for April 2020, a drop of USD358 compared to March 2020’s rate of USD7,221.

The impact of the Covid-19 crisis is hard to ignore, and analysts expect the outbreak to have a long-lasting impact; a rebound in rates will be reliant on containment – the longer and more widespread the Covid-19 outbreak, the more damage it will cause.

Last week, Drewry outlined three possible scenarios for the multipurpose/heavy lift shipping sector, depending on how the virus outbreak and the global economy develops in the second quarter of 2020.

Drewry’s base-case forecast, which it considers to be the most likely, starts with the caveat that a global economic recovery will not begin until the fourth quarter. “Any recovery that had been anticipated for Q2 2020 and Q3 2020 is now expected to be delayed as some of the pent-up demand will have vanished due to both the longevity of the crisis and the oil market crash,” said Drewry.

“The two events (Covid-19 plus the price of crude oil dropping below USD30 per barrel) have resulted in predictions of wide-scale unemployment and company bankruptcies, which when occurring together reduce investment and the collective purchasing power of the world’s population.”

As a result, Drewry expects multipurpose/heavy lift cargo demand growth to stagnate in the two years to 2021, growing at an average annual rate of just 0.3 percent.