The U.S. export market remained pretty buoyant throughout 2011, making the U.S. Gulf an attractive destination for shipowners compared with other markets. This meant that the supply of vessels in the U.S. was tight, and bulk freight rates for U.S. exports remained relatively firm. The same could be said for liner cargo, with rates in our trade that increased on the back of good volumes of mining machinery because of strong commodity prices. The strong export market is expected to continue into 2012 and beyond.
The trade imbalance in our sector seems here for the foreseeable future with soft demand in the U.S. steel industry resulting in light inbound sailings. We expect 2012 to be another tough year for imports, particularly for steel and raw material for the steel industry.
High bunker prices look set to continue into 2012, with Mexican crude averaging around $100 per barrel. Carriers will continue to try and conserve bunker fuel by slow-steaming and rationalizing port calls, while shippers can expect to face high BAF surcharges for the foreseeable future.
These market conditions, and the gloomy European and U.S. economic outlook, will make 2012 a challenging year for shipowners and operators in the Handy-size market, but this will also provide opportunities for those with cash reserves.