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Baltic Exchange Shipping Insights
DRY BULK REPORT
The market endured heavy losses throughout the past week, with the Capesize 5TC dropping from $8,352 to $4,772. In the lead-up to Chinese New Year (CNY) it became quickly evident positions had been managed the week before leaving only minimal loose ends to be tied up. Activity levels were never going to be anywhere near enough to counter an over-tonnaged Asia region. The Atlantic fared the worst of the two basins, dropping from $14,440 to $8,475 as what few vessels available were more than enough for the minimal cargoes available. With options dwindling, Brazil to China cargoes were seen to be fixed at bargain basement prices, as ballaster vessels looked to avoid being stranded in no-mans' land. C3 opened the week at $17.85 to close at $15.917. Most major charterers on the West Australia to China C5 were absent this week, except for Rio Tinto, which managed to lower the last done seemingly at will. The C5 opened the week at $6.832 to close out at $6.155.
Rates continued to slide all week with hopes of the market finding a bottom, but some very low trades were still witnessed. The Pacific began the week relatively active, but as Asian holidays approached, the market slowed significantly towards the weekend. Aside from East Coast South American trade, the Atlantic was bereft of any real vanilla transatlantic trips. Consequently, there was a distinct lack of demand and rates weakened further. On East Coast South America to Far East trades, $13,750 plus $375,000 ballast bonus was agreed a few times on nicely described 82,000dwt tonnage. An 81,000dwt vessel was fixed at $17,500 for a trip via the Baltic Sea to China. On the Indonesian coal round trips this week the median rate appeared at around $4,500 plus $45,000 ballast bonus. This was on 82,000dwt tonnage, basis delivery arrival pilot station (APS) Indonesia. For longer-duration trips via the North Pacific, a healthy looking $7,500 was achieved a couple of times on 82,000dwt tonnage.
Despite a good level of cargo enquiry, the sheer amount of prompt tonnage kept rates in check throughout the week. CNY celebrations also kept activity levels low from the Asian Basin. Limited period enquiry, but a 58,000dwt ship open East Coast United States, fixing 11-13 months trading at $11,000 was seen. A 61,000dwt ship open China achieving in the low $11,000s for similar period was also seen. In the Atlantic, a 63,000dwt vessel covered a transatlantic run from the US Gulf in the upper $14,000s. While from the South Atlantic, a 56,000wt ship fixed a trip to South-east Asia at close to $12,250 plus low $200,000s ballast bonus. The Asian Basin saw a 56,000dwt ship fixing delivery Samarinda trip to West Coast India at $4,750. From the Indian Ocean, a 63,000dwt ship covered delivery South Africa trip to Singapore-Japan range at $11,900 plus $190,000 ballast bonus. Brokers were waiting to see the direction after the widespread holidays.
There was generally more Handysize tonnage appearing in both basins throughout the week. Together with other routes, East Coast South America also started to show weakening signs, with the Baltic Handysize Index (BHSI) remaining in negative territory. Rates from Skaw-Passero range moved sharply lower, with a small gap between East Coast South America and US Gulf redelivery. A 34,000dwt ship delivery in Turkey was fixed at $4,000 for a trip to North Coast South America/Caribbean redelivery. Another similar-sized ship was fixed from Mukran for a trip to West Africa at $8,000. Activity was limited in the Pacific, with CNY approaching. In the Indian Ocean, a 36,000dwt was fixed basis delivery Kandla 22/25 January for a trip to West Coast India at $5,250.
TANKER MARKET REPORT
A busier week in the Middle East Gulf led to a slight softening of rates overall. Following an initial and partial recovery, 270,000mt to China had been peaking at WS90, before settling in the very low WS80s. 280,000mt to US Gulf (USG) eased a couple of points, to WS48/49 level. In the Atlantic region, rates for 260,000mt have settled around WS80, down three points overall for the week. Voyages of 270,000mt USG/China are now assessed at around $11m.
Rates for 130,000mt West Africa/UK Continent (UKC) have settled around WS130. Limited enquiry and a build-up of tonnage have weakened the 135,000mt Black Sea/Mediterranean by 12 points, to WS140. Rates for 140,000mt Basrah/Mediterranean also fell a couple of points, to WS80 level.
Rates for 80,000mt Ceyhan/Mediterranean voyages have been sideways, at WS145/147.5 level. 80,000mt Cross-North Sea recovered 15 points to WS152.5. 100,000mt Baltic/UKC gained about five points, to WS130/132.5 level. Stateside trade has been mixed again, with 70,000mt Caribbean/US Gulf assessed about 20 points up, at W325-327.5. Meanwhile, ballasters from Europe are still hurting the 70,000mt USG/Mediterranean route, with rates shedding another 20 points to WS197.5.
It was another very disappointing week for owners, with the market in the Middle East Gulf/Japan trade for 75,000mt easing a further 20 points, to sit now at barely WS100. A similar scenario played out on the 55,000mt, size with rates losing almost 35 points to WS95 and with charterers having plenty of choice. In the 37,000mt, Amsterdam-Rotterdam-Antwerp (ARA) to US Atlantic Coast (USAC) trade, the market has been hovering between WS155/160 region. WS150 was agreed on tonnage, with last cargo palm oil. However, with a few cargoes outstanding and WS162.5 agreed for North Spain, load brokers feel there is potential for modest firming here. The clean cross-Mediterranean market continued to fall away, losing another 35 points to WS170. Nevertheless, in the 38,000mt backhaul trade from US Gulf to UKC, rates are hovering in low/mid WS180s after peaking at WS 185.
CIRCULAR 03/20 - CAPE UPDATE
Further to Circular 51/19, route C15 (160,000 10% coal, Richards Bay to Fangcheng) will cease on 31 January 2020.
As route C15 is part of the BCI, it will be replaced by route C17 (170,000 10% ore, Saldanha Bay to Qingdao) in the calculation of the BCI, from 3 February 2020. There will be no change in the multiplier used.
Any questions or comments should be directed to email@example.com
BALTIC ACADEMY, SINGAPORE
The Baltic Academy returns to Singapore this February. For bookings, contact firstname.lastname@example.org
4 February: Bunker Hedging Post IMO 2020
For bunker buyers, traders and suppliers wishing to understand how IMO 2020 may affect the hedging of bunker fuel prices as the 'old' contract disappear and 'new' ones emerge.
5 February: Managing LNG Freight Risk Using Futures
Aimed at commercial and risk executives in the LNG market as well as ship operators and ship finance professionals. The course is also suitable for shipbrokers and financiers wishing to expand their knowledge of their clients' business.
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.
- The report is also available online at bt.sg/baltic