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Baltic Exchange Shipping Insights

A roundup of the week's tanker and dry bulk market

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DRY BULK REPORT

Capesize

The Capesize market endured another dreadful week of calamitous rate level falls, as the usual season low Q1 period combined with recent global events to stifle demand.

Brazil iron ore flows, hit by recent poor weather, have left the spot cargo market barren. Appallingly low Brazil to China cargo levels were heard in the market on Friday, causing C3 to mark down to $13.575, a drop of $1.49 for the week.

In the Pacific, the arrival of tropical cyclone Damien put an anchor on activity out of West Australia, with Dampier needing to close at the end of the week.

Bunkers gave some reprieve throughout the week to owners' earnings, while the coronavirus remains the wild card many are unsure how to anticipate.

Freight levels are firmly at the bottom of the market.

Scrubber-fitted vessels continue to command a healthy premium on cheaper high-sulphur fuel, but a lack of cargo options will be a concern for all owners.

Panamax

An eventful week finished with a contemplative outlook in the market. It began slowly, with a mid-week push particularly from East Coast South America.

Elsewhere in the Atlantic, the sheer numbers of early tonnage were counterbalancing the limited fresh demand on offer, with many operator ships performing own business.

In Asia, the North held firm for much of it, as some positional tightness on a few requirements kept rates at a steady level.

Further south, insufficient demand resulted in reduced levels for the shorter duration trips, as tonnage count increased here.

Varying rates concluded, including an 82,000dwt ship agreeing $13,500 plus $350,000 ballast bonus for a trip from East Coast South America to the Far East.

Another 82,000dwt ship achieved $11,800 plus $180,000 ballast bonus for a similar trip.

Meanwhile, in Asia, an 82,000dwt ship agreed $2,500 for a West Australia to China run.

A nicely described 84,000dwt ship fixed at $6,000 for a West Australia to Japan coal trip.

Supramax/Ultramax

It was another poor week, with many areas suffering a lack of enquiry and an oversupply of tonnage.

Period activity was limited, but a 61,000dwt ship was reported fixed basis delivery Muscat at $7,600 for the first 30 days and $11,000 for balance up to one-year trading.

From the Atlantic the only resistance came from owner's reluctance to send their vessels to the Asian basin.

From the US Gulf a 60,000dwt ship fixed in the low $20,000s for a trip to Japan.

In contrast from business which kept vessels in the Atlantic, a 55,000dwt ship fixed from the US Gulf for a trip to Turkey in the low $9,000s.

The Asian arena struggled, a 50,000dwt ship fixing a coal run from East Kalimantan to India at $2,000.

For Pacific round business, a 63,500dwt vessel was reported fixed basis delivery Busan trip via the North Pacific, redelivery Philippines, in the mid $5,000s.

Likewise the Indian Ocean suffered, a 57,000dwt ship being rumoured on subjects for a trip delivery Richards Bay, redelivery West Coast India, at $6,000 plus $50,000 ballast bonus.

Handysize

Overall the market was still weak and quiet in both basins, limited activity circulated.

Approaching the end of the week, slightly more cargoes were seen in the US Gulf and the rates improved on the larger-sized.

A 28,000dwt vessel was fixed from Southwest Pass for a grain trip to Morocco at $6,500, while a 39,000dwt ship was fixed for coal to the US East Coast in the $9,000s basis North Coast South America delivery in early part of the week.

In the Continent, a 34,000dwt ship was fixed for moving scrap cargo to the Black Sea at $7,500, whilst from East Coast South America, a 35,000dwt ship was booked for a trip to the Baltic at a similar rate.

More spot tonnage continued building up. There was no sign of improvement in the Pacific, with the coronavirus situation ongoing.


TANKER MARKET REPORT

VLCC

The market in the Middle East dropped further this week, with the deepening impact of the coronavirus outbreak on oil demand from China keeping activity low.

Rates for 270,000mt to China fell 12.5 points to the low WS 40s, while 280,000mt to US Gulf (USG) via the Capes came down almost 15 per cent to WS 30.

In the Atlantic, regional rates for 260,000mt West Africa to China reduced by 10 points, to WS 47.5 region. Whilst relatively busy, rates on the 280,000mt USG to China trade slid down $1.3m to now sit at $6.5m.

Suezmax

Rates for 130,000 West Africa to UK-Continent (UKC) weakened to WS 81.

However, they bounced back to WS 87.5/90 level on Thursday, representing a drop of about 10 points week-on-week.

Despite increased activity on the 135,000mt Black Sea to Mediterranean trade, rates corrected down 20 points, to the low-mid

WS 90s. For the 140,000mt Basrah to Mediterranean route, tonnage is still in ample supply, despite several fixtures this week, at the new market level of WS 40. This has decreased 10 points from a week ago.

Aframax

Rates for 80,000mt Ceyhan to Mediterranean voyages continued their downhill quest for the bottom, losing a further 19 points, to WS 72.5 level.

In Northern Europe, rates for 80,000mt Cross-North Sea lost another 22 points this week and came to WS 95 level.

Rates for 100,000mt Baltic to UKC have settled at WS 85-87.5 level, down about 12 points.

Bucking the negative trend, stateside rates have improved this week, as 70,000mt Caribbean to USG voyages are rated up 20 points at WS 140.

A very busy 70,000mt USG to Mediterranean market has boosted rates almost 30 points, also to WS 140 level.

Clean

It was an uneventful week for owners, with the market in the Middle East Gulf to Japan trade for 75,000mt remaining steady in the very low WS 80s.

In the 55,000mt size, the market settled in low WS 90s.

In the 37,000mt UKC to US Atlantic Coast (USAC) trade, rates initially dipped down to WS 135.

However, improved levels of enquiry, combined with a tighter tonnage list saw levels recover, with a cargo from Sines reportedly fixed at WS 150 level.

Conversely, in the 38,000mt backhaul trade from US Gulf to UKC, rates were in freefall, with WS 102.5 agreed by Koch and WS 90 by BP, albeit on a ship needing to come across for drydock.

This is in contrast with WS 150 from a week ago.

The clean cross-Mediterranean market saw weather delays lead to uncertain itineraries and rates gained 20 points to WS 185, with WS 190 agreed for prompt replacement tonnage.


This report is produced by the Baltic Exchange.

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