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Baltic Exchange Shipping Insights
Charterers continued to have the upper hand as rates for 270,000 tonnes to China languished in the very low WS 40s while the market for 280,000 tonnes Cape/Cape to US Gulf lost 0.5 points to WS 18.5. West Africa to China fell WS 1.25 points to WS44.5 for 260,000 tonnes cargo.
Crude from Hound Point to Ningbo fixed and failed at US$4.35 million. UML fixed a Ceyhan/Taiwan run at US$3.9 million. A Caribbean/west coast India voyage went at US$3.2 million on 2002 built tonnage.
Although the volume of enquiry improved, healthy tonnage availability in West Africa saw rates for 130,000 tonnes to Europe fall a further 2.5 points to WS 50. Black Sea hovered around WS 65 for 135,000 tonnes to Mediterranean.
In the Mediterranean, Algeria/Finnart was fixed WS 60 basis 130,000 tonnes. A Libya/north China trip went at US$2.2 million while Ceyhan/Mumbai was fixed at US$1.5 million after attracting 12 offers for the cargo.
A steady week in the Mediterranean saw rates around WS107.5/110 as competition from Suezmaxes capped rates around this level.
In the Baltic, maintenance at Primorsk combined with vessels taking system cargoes left little for owners to fix and rates unsurprisingly dropped 10 points to WS 75 while 80,000 tonnes cross North Sea rates followed suit also down 10 points to WS 90.
The 70,000 tonnes Caribbean/up coast trade has weakened by a further five points to sit now at WS 85.
The market for 55,000 tonnes from ARA or Skikda held around WS 102.5 level, down 2.5 points from a week ago with tonnage continuing to ballast across after the 50,000 tonnes Caribs/upcoast market fell 15 points to WS 90.
Improvements in both the LR1 and LR2 markets saw rates gain 10 points to WS 100 for 55,000 tonnes Middle East Gulf/Japan whilst 75,000 tonnes to Japan was paying in the region of WS 90.
The 38,000 tonnes backhaul trade from US Gulf/UKCont continued to weaken losing almost 15 points to finish the week around WS 75.
This led to more tonnage ballasting across and rates in the 37,000 tonnes Continent/USAC market came under downward pressure easing 16 points to WS 145, with potential to soften further.
The north Atlantic market came under pressure with rates sharply lower especially for transatlantic business but this too had a knock-on effect for front haul. Owners' resistance crumbled in the face of very slow trading.
On the BCI C7 route, Jera fixed a 10-19 February 160,000-tonne 10% cargo at US$7.70.
As the week closed out there was increased Brazil activity, cargoes fixed from Tubarao to Qingdao for February and March positions with rates in the upper US$14.00s for February and in excess of US$15.00 for the first half of March.
South Africa fixing was limited to coal from Richards Bay to India where rates ranged from the upper US$8.00s to just over US$9.00 depending on the discharge port. There were ore cargoes to move but seemingly charterers were in no rush to fix.
The West Australia market was particularly slow as the week closed out with the miners stalling but Rio Tinto finally covered, securing two ships for 16 February onwards both at an easier US$6.25.
Timecharter activity was slow and the period market remained at odds with the spot with charterers still willing to pay steady rates for the longer durations.
The period market seemed limited to shorter durations up to five to seven months this week with the volume of trades waning as the softening spot market lead to charterers only fixing when necessary.
However, period rates proved more robust than the spot market with a modern 75,000 dwt fixed at US$13,750 basis delivery Singapore for five to seven months.
The transatlantic market remained fairly slow with rates for shorter trips being discounted more as the week progressed and owners looked to reposition hoping the market would find some impetus later.
US Gulf grain trade was negligible again this week with front haul cargoes limited to north coast South America and fixed around US$18,000 for LMEs from Gibraltar and the Continent and fewer cargoes fixed from east coast South America as the focus shifts to March stems. Charterers were still fixing vessels on an APS basis for February dates but rates had dropped to US$15,000 plus US$500,000 ballast bonus with good redelivery in south-east Asia on modern kamsarmaxes.
In the Pacific, the smaller ships came under pressure with some fixing below US$10,000 for round voyages, and although the larger types fared better, rates slid lower during the course of the week. As it closed out, a kamsarmax reportedly went at US$10,600 for an Australian round voyage with sources suggesting the owner wanted to fix early to avoid the upcoming Chinese New Year - not a positive sign for future activity.
An uninspiring week across the board in most areas. This was reflected in the lack of fresh period activity although a 56,800-dwt was reported delivery Tianjin early February for six to eight months trading at US$10,500.
In the Atlantic, the US Gulf lost ground from previous weeks with a lack of fresh enquiry and a build-up of tonnage. Limited activity from east coast South America with rates trading sideways while the Continent remained flat with limited scrap activity. The Mediterranean held steady and a 56,400-dwt fixed delivery Turkey for a trip via the Black Sea redelivery Egyptian Mediterranean at US$9,000.
Asian routes made ground early in the week but at the end the rates eased. From south-east Asia, a 57,000-dwt reportedly fixed from Singapore via Indonesia redelivery west coast India at US$7,500.
Owners looked for a slight premium to trade up to north Asia areas and a 58,700-dwt fixed delivery Singapore trip via Indonesia redelivery China at US$10,500. From the Indian Ocean, there was activity from South Africa where a 53,300-dwt fixed delivery Richards Bay trip Arabian Gulf- west coast India at US$11,250 plus US$140,000 ballast bonus.
A week of continuous falls in the both the Atlantic and Asia markets. Negative sentiment was evident particularly for vessels open east coast South America and US Gulf.
Brokers suggested it might take some time to restore confidence in the handy market with little fresh business appearing.
A 38,000-dwt open Texas was fixed US$14,250 daily for a trip to Morocco, and a 33,000-dwt open in the US Gulf was paid at the same level for a similar run with redelivery Algeria.
Trips from east coast South America to the Continent were reported to have fixed at US$13,000 daily.
For the longer durations, a 33,000-dwt open Gibraltar went for two to three laden legs at US$8,900 daily with redelivery in the Atlantic.
In the East, a small-sized handy vessel was booked from Ho Chi Minh City for a run via Thailand to Bangladesh at a rate in the low US$7,000s.
Baltic Exchange applies changes to BDI
Following consultation with members, the Baltic Exchange will be implementing previously announced changes to the Baltic Dry Index (BDI).
From 1 March 2018 the BDI will be re-weighted to the following ratios of timecharter assessments: 40% capesize, 30% panamax and 30% supramax and will no longer include the handysize timecharter average.
This report is produced by the Baltic Exchange.
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