Baltic Exchange Shipping Insights

A roundup of the week's tanker and dry bulk market (April 9, 2021)

Capesize

The Capesize market continued this week with its constant and relatively steady improvement in rate values. The Capesize 5TC lifted 4,058 over the shortened post Easter holiday week to $23,911. While the Transpacific C10 remains the premium paying basin at $27,221, the Atlantic Basin C8 has closed the gap now rated to $19,850, albeit fixtures still remain few and far between in the region.

The Fronthaul C9 and Backhaul C16 stood out this week as solid earning fixtures well into the mid $40k regions drove the C9 up to $44,000, while the C16 gathered pace late in the week closing in on $10k to settle at $7,885 with several believing it well undervalued.

Out of Brazil, Vale was able to obtain $21 levels for tonnage on C3. But sources say the remaining bids have now all needed to lift - pushing the end of week closing to $22.475.

Fixture activity remains strong on the Capesize sector and possibly building without the tailwinds of the smaller sizes.

Panamax

The Panamax market was described by some as floorless this week, with significant declines across the board and at the time of writing no sign of halting.

Despite owners' resistance, a burgeoning tonnage count building - especially for the nearby position - combined with a lack of demand and a plunging FFA market heaped pressure on rates.

No routes escaped corrections and a glut of fixing and failing vastly reduced voyage rates being concluded, culminating in the EC South America round trip delivery Singapore being valued circa $24,500 on Tuesday now being concluded in the $18,000's for 82,000-dwt on same delivery.

Likewise NoPac/Australia round trips diminished from $22,500 early part to now breaching the $20,000 mark with little support evident.

The repositioning and shorter duration coal trips via Baltic sea and Indonesia became popular with owners and rates were discounted here with owners looking to lock in some cover at least with the immediate outlook looking bleak.

Ultramax/Supramax

Overall, it was a quiet week after the Easter holidays in the West and Qingming Festival in the East.

The BSI continued declining within the shortened week, with the time charter average now below $20,000 for the first time since the end of February this year. All key areas in the Atlantic appeared to be slow whilst rates further weakened.

Tonnage started building up in the US Gulf with little enquiry to offer support. Most brokers saw no sign of a rapid recovery from the Gulf in the upcoming days and similarly in east coast South America and Skaw-Passero range.

On the other hand, in the Pacific, rates slightly improved towards the end of the week and all the three time charter routes under Baltic Supramax Asia Index climbed above $20,000. Some brokers saw more short period enquiries for Supramax delivery in the Far East and the period rate remained firm.

Handysize

Since the yearly high so far on 19 March at 1,360 points, the BHSI continued its steady fall this week and was today down to 1,049 points - a drop of over 330 points in three weeks. This week alone, the HS4 has dropped from $15,208 last Thursday to $12,643 which is over $2,500. The Atlantic routes were hit the hardest with reports of lower than last done now being the norm. The shorter week due to Easter reduced the visibility of activity.

However, a 38,000-dwt was rumoured to have fixed a trip from the US Gulf to the Spanish Mediterranean at $14,500, whilst a 28,000-dwt had fixed delivery SW pass for a trip to Turkey at $11,000.

On the Continent a 34,000-dwt fixed delivery passing Skaw for a trip to the central Mediterranean at $16,000.

In Asia, some brokers had said they were starting to see more requirements coming into the market so the bottom may be found soon.

A 39,000-dwt open China fixed a trip via Vietnam with redelivery China at $20,000. Whilst earlier in the week, a 33,000-dwt was alleged to have fixed a trip from China via CIS back to China with coal at $19,000.

VLCC

Rates have slipped in all sectors. In the Middle East the market for 280,000mt Middle East to US Gulf trip (routing via the Cape/Cape) is assessed a point lower at WS18, while rates for 270,000mt to China have eased 1.5 points to about WS31.5 which shows a round-trip TCE of about $500 below zero and there are reports overnight of NPI taking a Frontline vessel at WS31 to Yingkou in North China.

In the Atlantic, rates for 260,000mt West Africa to China dropped seven points to WS32.5 - a round-trip TCE of $1,600/day - and here overnight reports have Unipec taking a Frontline vessel at WS32.

Meanwhile, 270,000mt from US Gulf to China saw rates fall over $500k to $4.25m (about $7k/day TCE round-trip).

Suezmax

In the 135,000mt Black Sea/Med market rates have fallen 7.5 points to the WS70 level (~$5,500/day TCE) while in the 130,000mt Nigeria/UK Continent market, rates have dipped by 1.5 points to the low WS60s (~$7.7k/day TCE).

The assessment of the market for 140,000mt Basrah/Med remained flat at WS20.5 with fixtures reported this week at WS19.5 and WS22.5.

Aframax

In the Mediterranean, the market has eased significantly with rates for 80,000mt Ceyhan/Lavera diving 22.5 points to mid WS90s (a TCE of about $7.4k/day basis a round voyage).

In Northern Europe, the market for 80,000mt Cross-North Sea fell back eight points to WS100 level ($5.6k/day TCE) while rates for 100,000mt Baltic/UK Continent fell 8.5 points to the low WS80s ($11.2k/day TCE).

On the other side of the Atlantic rates for 70,000mt Caribbean/US Gulf have fallen a further five points to WS77 region (a TCE of about minus $600/day) while for 70,000mt US Gulf/UK Continent rates have remained steady at the WS75 mark.

Clean

Two consecutive short weeks saw momentum shift in charterers' favour and in the 75,000mt Middle East Gulf/Japan trade, rates eased by around 4.5 points to WS126.25 region and it was a similar story in the LR1 market with rates softening 3 points to close to WS132.5.

The 35,000mt AG/East Africa trade came under downward pressure and now sits at WS162.5 region having started the week in the high WS170s.

For owners plying the 37,000 Cont/USAC trade it has been a disappointing week with the market sliding from WS140 down to WS125 before a modest recovery to WS130.

The MR market into West Africa followed a similar pattern with rates down 10 points at WS140.

In the 38,000mt backhaul trade from US Gulf to UKContinent it was an uneventful week with the market losing 3 points to WS81.5 level while the US Gulf /Brazil trade was flat at WS126.25.

The market in the 30,000mt cross-Mediterranean trade came under renewed downward pressure and now sits at WS140.

BALTIC EXCHANGE NEWS

Managing volatile container freight rates and improving contract security: 15 April 2021, 13:00 - 13:45 London / 20:00 - 20:45 Singapore: The Baltic Exchange will be hosting a Webinar to discuss how the FBX Index can be used to manage risk in the container freight market. Hear from Javier Romeu, CEO, TIBA; Keith Gaskin, Commercial Group Director, SEKO Logistics; Peter Stallion, Head of Container, Freight Investor Services and Nikos Nomikos, Professor of Shipping Finance and Risk Management at The Business School, City University.


This report is produced by the Baltic Exchange.

The Baltic Exchange, a wholly-owned subsidiary of Singapore Exchange, is the world's only independent source of maritime market information for the trading and settlement of physical and derivative contracts.

Its international community of over 650 members encompasses the majority of world shipping interests and commits to a code of business conduct overseen by the Baltic.

For daily freight market reports and assessments, please visit www.balticexchange.com.

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes