Baltic Exchange Shipping Insights

Capesize

THE market maintained a broadly positive trajectory throughout the week, with the BCI 5TC building on its opening level and rising from $42,105 to $48,399, as Atlantic strength and a firmer Pacific combined to underpin sentiment.

In the Pacific, initial gains were checked by a brief correction on Tuesday, but the market quickly regained momentum as sustained miner participation, together with operator-controlled cargoes, supported rates.

The standout move came later in the week when C5 values surged above $16 for earlier arrivals, marking a significant recovery from the low $14s seen at the start of the week. The Atlantic provided the main catalyst for the week’s advance. The North Atlantic firmed notably, with both transatlantic and front-haul routes posting healthy gains as fresh demand emerged and higher fixtures were concluded.

South Brazil and West Africa to China business also strengthened early in the week, with C3 climbing into the high $37s. While momentum appeared to stall on Thursday amid limited bidding activity, underlying tonnage tightness continued to provide support.

Owners remained firm with offers above $38, while charterers largely favoured older or larger vessels. Reports of $38.50 being fixed on more than one occasion emerged on Friday, however, injecting renewed confidence into the market and lifting sentiment heading into the weekend.

Panamax-Kamsarmax

The market this week bounced back, with improvements everywhere. The North Atlantic went from minimal transatlantic enquiry to rates rising by almost $2,000 daily, with an 82,000-dwt fixed midweek at $20,500 delivery/redelivery Gibraltar via North Coast South America.

Fronthaul in the North was already faring better, but also increased, with an 82,000-dwt open Liverpool fixed via the US Gulf to China at $32,750 at the start of the week (equivalent to low $29,000s BKI) which improved by around $1,000 daily by the weekend.

East Coast South America was very active for second half September dates and the P6 gained about $2,000 daily during the week with an 80,000-dwt fixed basis Singapore at $22,000 in the middle of the week.

Despite the Atlantic making most of the headlines, rates in Asia for round voyages saw the biggest increases driven by North Pacific grains and Australian mineral demand, added to the improving East Coast South American market.

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Baltic Exchange Shipping Insights

At the beginning of the week, an 82,000-dwt fixed from Kashima for a grains round voyage at $18,500, with a similar type fixed a few days later at $20,000, whilst larger types fixed coal from Australia with an 85,000-dwt fixed from Yeosu at $21,500 for a trip back to the Far East. The period market was active, albeit slightly tempered by the need for first employment, with a modern 82,000-dwt fixed for 2 years delivery China at $20,050 with the scrubber benefit shared between owners/charterers.

Ultramax/Supramax

A week of consolidation with little movement or direction to the market. North America began the week looking softer, but as the week went on, rates remained relatively flat with a 63,000-dwt fixed from Altamira with petcoke to Bahudopi at $31,000 and a 61,000-dwt fixed from the Mississippi to East Mediterranean with coal at the same level.

The Continent was steady in limited trading with a 61,000-dwt fixed at $21,500 for scrap from the Continent to East Mediterranean, but the Mediterranean market had a torrid week without much fresh demand and a lack of Black Sea grains. The South Atlantic benefited from a bounce in Panamax rates with a 64,000-dwt fixed from East Coast South America to the Far East at $19,850 plus $985,000 ballast bonus but was fairly unchanged over the course of the week.

In Asia rates increased very slowly during the week with a 63,000-dwt fixed from South Korea for North Pacific grains to South-east Asia at $21,000, as grain activity supported the market in the North, but further South Indonesia saw a lot more cargoes to India and Bangladesh which also drew tonnage from the Indian Ocean.

South Africa looked flat with a 64,000-dwt agreeing $24,000 plus $240,000 ballast bonus from Port Elizabeth to China and the period market was more subdued with reported trades mostly concluded last week as charterers waited to see what direction the market would take.

Handysize

The Handysize market posted a modestly positive week overall, with the Baltic Handysize Timecharter average rising from 15,755 on Monday to 15,855 by close.

Sentiment improved in several regions, although fixture volumes remained relatively limited and market participants often lacked sufficient fresh business to firmly establish direction. The US Gulf remained the strongest talking point throughout the week.

Brokers reported tightening tonnage availability, improving bid levels and increased cargo demand, contributing to a firmer tone. Fixture activity included a 32,000-dwt vessel fixing a grain voyage from the US Gulf to the UK Continent at $14,000 daily, while a modern 40,000-dwt vessel secured $21,000 daily for a trip from Altamira to Guayaquil.

Across the Atlantic, activity was mixed. East Coast South America benefited from improved cargo availability, with a 37,000-dwt vessel fixing a Pacific South America trip at $16,750 daily. In the North Atlantic, a 37,000-dwt vessel fixed a trip to West Africa at $16,500 daily. Sentiment softened towards the end of the week, particularly in the South Atlantic.

Asian markets showed gradual improvement, supported by limited prompt tonnage and continued cargo demand. Fixtures included 33,000 to 38,000-dwt vessels fixing regional and Pacific round voyages around the $15,000 daily level. Despite improving sentiment, overall activity remained light, leaving participants cautious about the sustainability of recent gains.

Clean

LR2

The TC1 75kt MEG/Japan index strengthened slightly this week, climbing 3.33 points to WS540 as sentiment improved in the East. A voyage west weakened, with the TC20 90kt MEG/UK-Continent index decreasing by $187,500 to $9.24 million. In Europe, the TC15 80kt Mediterranean/East index gained $433,000 to $6.02 million, with the corresponding Baltic round-trip TCE rising by $7,942 to $39,378/day via Suez.

LR1

MEG LR1s differ this week depending on the discharge location. The TC5 55kt MEG/Japan index rose 13.75 points to WS579.38, reflecting firmer sentiment for fixtures going East. A run west on TC8, 65kt MEG/UK-Continent weakened slightly, with the index down 2.31 points to WS112.64.

MR

The TC17 35kt MEG/East Africa index firmed this week from WS507.86 to WS525.00, this took the Baltic TCE for the run to $60,783/day round trip. On the UK-Continent, MRs can be seen coming off with TC2 37kt ARA/US-Atlantic Coast dropping 5.00 points to WS100.63. The Baltic TCE for the round trip is now at -$4,225/day. The TC14 38kt US Gulf/UK-Continent index went from WS230.71 to WS213.57.

The Baltic round trip TCE for the run is now at $19,742/day. The Caribbean voyage on TC21, 38kt US Gulf/Caribbean followed the same pattern and is currently at $647,857. The corresponding TCE is now at $14,224/day on Baltic description. The MR Atlantic Triangulation Basket TCE settled at $22,939/day.

Handymax

In the Mediterranean, Handymax rates came off circa 1.11 points this week. The TC6 30kt Cross-Mediterranean index is now at WS165.00 generating a Baltic TCE of $8,489/day. The TC23 30kt Cross UK-Continent rose to WS180.00 this week, taking returns to $8,889/day on Baltic description.

VLCC

The rate for the TD3C route (270,000mt Middle East Gulf to China) is now assessed another 54 points stronger than last Friday, at WS623, which corresponds to a daily round-trip TCE of just over $647,000 for the standard Baltic VLCC. TD34 (Gulf of Oman/China) was almost 6 points higher than a week ago at WS232.5, giving a round-trip TCE of over $219,400/day.

In the Atlantic market, the rate for the 260,000mt West Africa to China route (TD15) was weakened by 17 points to about WS205, giving a round voyage TCE of $179,600/day, while the US Gulf to China route (TD22) fell by just over $1 million to $24,600,000, which gives a daily round trip TCE of just shy of $171,000.

Suezmax

In the Suezmax sector, rates were a lot softer across the board. The rate for the 130,000mt Nigeria/UK Continent voyage (TD20) slumped 86 points to WS237.78, which translates into a daily round-trip TCE of about $110,700. The TD27 route (Guyana to UK Continent basis 130,000mt) dropped 78 points to WS250, giving a daily round trip TCE of $120,080. The 145,000mt USG/UKC (TD33) fell by about 70 points to WS193.33, which gives a round-trip TCE of just over $103,000/day.

In the Black Sea, the news over the last week or so has ‘calmed’ the market, and rates for the TD6 route of 135,000mt CPC/Augusta have fallen 135 points to the WS400 level, which shows a daily round-trip TCE of just under $284,250.

Aframax

In the North Sea, the rate for the 80,000mt Cross-UK Continent route (TD7) improved by almost 11 points to about WS214, showing a daily round-trip TCE of about $107,000 basis Hound Point to Wilhelmshaven.

In the Mediterranean, the rate for 80,000mt Cross-Mediterranean (TD19) firmed by another 11 points to WS268. Basis Ceyhan to Lavera, this shows a daily round trip TCE of $86,377.

Across the Atlantic, the charterers have managed to get a better hold of the market. The 70,000mt East Coast Mexico/US Gulf route (TD26) plummeted 182 points to WS200, giving a daily round-trip TCE of $36,900 while the 70,000mt Covenas/US Gulf route (TD9) was driven down 163 points to WS197, translating into a daily round trip TCE of about $39,600.

The rate for the transatlantic route of 70,000mt US Gulf/UK Continent (TD25) dropped 117 points this week, to WS201.67, which gives a round trip TCE basis Houston/Rotterdam of a little below $40,000.

On the Vancouver exports, the TD28 (80,000mt crude oil Vancouver to China) slipped $12,500 to $3,116,667 (giving a round trip TCE of just under $43,900/day) while TD29 (80,000mt crude oil Vancouver to Pacific Area Lightering point off the USWC) remains at WS250.

LNG

The LNG market remained under pressure this week, with Atlantic rates facing pressure as vessel availability continues to grow against limited cargo opportunities. While some developing requirements emerged, activity remained muted overall.

On the BLNG1 Australia–Japan route, rates declined by $12,800 week-on-week to settle at $49,800/day. A weakened sentiment started to appear on the back of ample tonnage.

The BLNG2 US Gulf–Continent route increased by $2,100 to close at $13,100/day. Despite the modest week-on-week gain, Atlantic fundamentals remain weak, with fewer cargoes, shorter sailing distances and a large number of available vessels continuing to pressure freight earnings.

Similarly, the BLNG3 US Gulf–Japan route rose $1,900 week-on-week to settle at $29,800/day. The route found some support towards the end of the week, although overall sentiment remained subdued as long-haul opportunities remained limited.

In the time charter market, sentiment softened across all periods. The six-month rate fell by $6,200 to $54,800/day, while the one-year term declined by $4,700 to $54,967/day. Further out the curve, the three-year period eased by $2,000 to $71,500/day.

LPG

The LPG market was quieter this week, with only a handful of fixtures reported. Limited activity resulted in softer sentiment, although freight levels remained relatively supported by a balanced tonnage list.

On the BLPG1 Ras Tanura–Chiba route, rates settled at $217.75, with TCE earnings closing at $210,291/day.

The BLPG2 Houston–Flushing route declined by $9.00 week-on-week to settle at $148.75, with TCE earnings falling by $11,341 to $170,149/day. Limited fixing activity and a lack of fresh cargo enquiry weighed on Atlantic rates throughout the week.

Similarly, the BLPG3 Houston–Chiba route fell $9.17 to close at $263.33, while TCE returns decreased by $4,604 to $154,458/day. Overall, it was a slower week for the LPG market, with only a small number of fixtures concluded and freight rates easing modestly across the routes.

Container

It has been a flat week across the key FBX trade lanes. The Panama Canal transit authority has advised that due to lower water levels they are reducing the number of daily transits and reducing the maximum allowed draft levels, which will have a knock-on effect on FBX03 to the USEC.

This will mean less containers being carried on each vessel due to the draft restrictions and if it worsens will cause most vessels to have to divert via the Cape of Good Hope, tying up tonnage for longer and increasing costs.

The Pacific loop trade lane FBX01 (China/East Asia – US West Coast) increased by $86 from last Friday, ending the week at $7,655 and is up $5,038 since the start of the year. Rates from the Far East to the USEC FBX03 (China/East Asia – US East Coast) remained flat at $9,791, this route is up $6,034 since the start of January.

Trade into the North Continent from the Far East FBX11 (China/East Asia – North Europe) dropped $56 week on week, ending the week at $4,643 and is up $1,643 since the start of the year. Trade into the Mediterranean from the Far East FBX13 (China/East Asia – Mediterranean) lost $139 week on week, ending the week at $4,836 and is just $8 lower than at the start of the year.

This report is produced by the Baltic Exchange. (All currencies are in US dollars.)

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