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Baltic Exchange Shipping Insights
After a relatively positive start, the market stalled mid-week, dropping below $6.00 on the West Australia/China run, regaining some ground as the week closed out.
Heavy rains in Southern Brazil, force majeure in Saldanha and cyclone warnings in West Australia all conspired to curb activity.
The appearance of the Australian miners was intermittent and limited, but by the close, rates recovered to finish in the low $6.00s.
Compared to voyage rates, time charter numbers were still reasonable.
A 2002-built average Capesize fixed in the low $10,000s daily for an East or West Australian round. A Japanese charterer took a 177,000-tonner, open Fukuyama for a Port Hedland/Japan run, at $16,000 daily.
Period rates were still being agreed at numbers considerably higher than spot values. The New Orleans, 180,960-dwt, 2015, fixed to SwissMarine for 11 to 13 months trading with 25 March delivery China at $21,000 daily, with other well-described ships having achieved similar levels.
The imbalance remained with Brazil, with trade very slow. Rates from Tubarao to Qingdao just managed to stay in the $14.00s.
Transatlantic rates were very weak, with the rate for a Puerto Bolivar/Rotterdam run at under $6.00. Time charter rates were in the mid-high $4,000s daily.
The period market continued to be very active, as charterers' appetites for forward cover remained.
However, generally, rates have been stagnant now for the past three weeks.
The Atlantic market experienced a slight wobble early in the week, as a build-up of prompt tonnage led to owners having to discount, to get covered.
Vessels on later positions maintained their rates and were happy to wait.
All week the larger Post-Panamax types struggled to find suitable trades. Grains from the US Gulf remained sporadic, but East Coast South America continued to be a strong draw for vessels in the Pacific, with second-half April especially firm, although this was seen on all positions.
A 2005 built 75,000-dwt vessel eta East Coast South America 1-5 April, fixed at $16,000 plus $600,000 ballast bonus, to the East, which recently only modern Kamsarmaxes had been achieving.
At the beginning of the week the North Pacific was the opposite of the Atlantic, with a shortage of earlier round voyage candidates pushing rates higher, with well described Kamsarmaxes fixing at $15,000 or more for rounds.
However, going into the weekend, the sentiment began to turn a little. In any case, rates still finished higher than last week.
Rates remained in positive mode during the week, especially in the Asian basin.
However, as the week ended, brokers reported a build of tonnage from the US Gulf and a slowing down of fresh cargoes in the East.
Period activity remained buoyant, with a 55,500-dwt, open South China early April, fixed for four to six months, trading redelivery worldwide was fixed at $12,850. A 61,400-dwt, open China, was also booked for four to seven months trading at $14,000.
Improved rates were seen from the East coast South America area, with Ultramax vessels fixed in the mid $15,000s plus $550,000 ballast bonus for front hauls.
On trans-Atlantic business, a 58,000-dwt was rumoured fixed for a trip to the Mediterranean in the low-mid $17,000s.
From the US Gulf a 53,500-dwt was reported fixed basis delivery Beaumont end March, for a trip redelivery Japan at $24,500.
Elsewhere, a 55,000-dwt agreed delivery Abidjan, for a trip to China, in the mid $18,000s.
While from the Black Sea, a 55,600-dwt was reported fixed delivery in the Black Sea to Vietnam at $21,500.
Some good numbers were reported in the Asian market.
A 63,000-dwt was booked delivery Singapore trip via Australia, redelivery Philippines, at $16,500.
For NoPac rounds, a 55,000-dwt was covered basis delivery CJK, for the round redelivery Singapore-Japan, at $12,000.
On the India runs, a 57,500-dwt went basis delivery Singapore for a trip via Indonesia, redelivery India, at $15,000.
In the Indian Ocean, a 58,000-dwt fixed Port Elizabeth trip, redelivery East coast India-Bangladesh range, at $12,750 plus $275,000 ballast bonus.
Most of the routes in the handy sector remained in positive territory this week. Towards the weekend, the East coast South America market slowly recovered from recent easing in rates, particularly for the stems with dates before the first half of April.
However, brokers also suggested the rates from the US Gulf might come off in line with Supramax-sized vessels.
Another strong week in the Pacific, with a longer duration trip reported at $11,000 daily on a 38,000-dwt delivery CJK, for two laden legs.
From East coast South America, two similar-sized tonnage were both fixed to the Baltic at $14,000 daily and $12,750 daily.
Larger-sized handy vessels from the area were reportedly booked at $14,000 daily for a grain trip to West coast Central America, or $17,000 daily, to West coast South America.
A 35,000-dwt, 2011-built vessel, open Adabiya, was concluded for a trip to Indonesia with rock phosphate, at $13,500 daily.
A 28,000-dwt, 2012-built, open in the Philippines, was fixed to load steel from Southeast Asia to the Mediterranean at $7,500 daily.
The LR2 market for 75,000 tonnes from Middle East Gulf to Japan eased 15 points to WS 95, while LR1s have been steady at WS112.5/115 basis 55,000 tonnes cargo.
On the back of healthy volumes of enquiry, rates for 37,000 tonnes, Cont/USAC, have been steady at WS 130. Brokers feel there is potential for the market to firm here.
The 38,000 tonnes backhaul trade from US Gulf/UKCont, lost a further 7.5 points to WS 77.5, before recovering modestly to low WS 80s.
A more active week in the Middle East Gulf saw owners capitalise, as rates for 270,000 tonnes to China gained around seven points to WS 44.
Hyundai Merchant Marine (HMM) paid WS 41, basis 274,000 tonnes size, to South Korea. After Valero paid WS 17 Cape/Cape to US Gulf, rates for 280,000 tonnes have firmed further, with the market now assessed at around WS 20/20.5 level.
West Africa/China runs have similarly increased, with rates for 260,000 tonnes improving seven points to WS 45.
Caribbean saw a marked uptick in enquiry, as three runs to West Coast India all went at between $2.7/2.75 million.
Unipec fixed a USG/Ningbo run at $3.95 million. While a Covenas plus US Gulf load to Singapore-China went at $3.45-$4.45 million respectively.
Shell paid $2.475 million for fuel from Rotterdam to Singapore.
Another difficult week for owners saw rates for 130,000 tonnes from West Africa to UKContsettle at just below WS 55. The weak market here impacted on the Black Sea market, which fell 2.5 points to WS 70.
However, a significant increase in activity saw rates recover, with Chevron reported to have taken Delta tonnage at WS 77.5/80 for UKC-Med respectively.
After Chevron took Jag Lok at $2.35 million, Trafigura subsequently paid $2.75 million for runs to South Korea.
In the Med, Lord Energy paid $2.6 million from Arzew to Ningbo, and Sonatrach paid $2.3 million for Algeria to Rayong. Going West, Mercuria fixed 135,000 tonnes at WS 42.5 for Ceyhan/US Gulf.
Although it was an active week, plenty of tonnage saw rates stagnant in the 80,000 tonnes cross-Med market, with Ceyhan paying around WS 85.
Black Sea rates eased modestly to between WS 87.5/90 level.
Pressure told in the Baltic, with the market weakening from WS 85 to between WS 80/82.5, depending on the options required.
The 80,000 tonnes cross North Sea market eased 2.5 points to WS 92.5.
The 70,000 tonnes Caribbean/upcoast market has been steady in the low WS 90s.
Status quo was maintained with rates for 55,000 tonnes from ARA or Skikda to US Gulf hovering around WS102.5/105 region.
This report is produced by the Baltic Exchange.
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