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Baltic Exchange Shipping Insights

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

DRY BULK REPORT

Capesize

As Covid-19 continued to ratchet up tensions across the globe, the Cape market dealt with the change to remote working. Most regions of the world are now under no illusions as to the severity of this crisis and are acting to mitigate amongst the daily changing circumstances. Force majeure declarations are increasingly common, with the latest reportedly at European steel mills.

At the beginning of this week South Africa announced intended lockdowns on its mines. This led to a rush of fixtures on Tuesday, as West Australia to China C5 potentially became the only show in town with cargo flow. C5 traded down to a low of $4.003 this week before lifting at the end of the week to $4.223.

Brazil to China business has maintained a faint heartbeat, with owners being picked off slowly at ever sharpening levels. C3 closed the week out at $9.29. The Cape 5TC closed out the week at $3,675, down -392.

Next week promises to be defined as another one of uncertainty. While some industries are feeling the impact more than others, it's imperative in these trying times we all keep calm and carry on - remotely.

Panamax

A turbulent week with Covid-19 dominating headlines. Subsequently, force majeure was declared in several countries and integral shipping ports, as nervousness enveloped the market.

Nevertheless, bright news of soya bean meal crushing margins turning positive in China and a good volume of fresh sales were concluded ex-Brazil and USA into China as a result thereof. This translated into a positive move for the Baltic Panamax Index (BPI) route P6, with rates moving on the week.

Rates for fronthaul trips, basis delivery Southeast Asia and India positions, were fixed in the $8,000's, with one very well-described 82,000dwt vessel achieving $9,500 from Singapore.

Asia was something of a two-tier market, with the North seeing improved numbers due to solid levels of North Pacific demand.

A very good design 81,000dwt new building, delivery South Korea, achieved $7,750 for a North Pacific round trip, whilst Indonesia lacked volume, partly due to force majeure in Indian ports, which drove down coal sales.

Supramax/Ultramax

An anaemic week for the Supramax market - driven lower predominantly by the Atlantic routes, as macro concerns continued to weigh heavily on the index.

On already decreasing cargo volumes, many charterers, who were not forced to comply with tight nominations, duly withdrew from the market.

Meanwhile, brokers said that the tonnage count in the Atlantic continued to grow - correspondingly the offers appeared to track down.

The crucial long ton-mile fronthaul routes suffered a significant amount of erosion, with the S1B Black Sea to China route losing $1,518 on the week to close at $16,782, the S1C US Gulf to China route dropping $1,867 on the week to close at $19,042, and the S5 East Coast South America to China route declining by $2,430 on the week to close the week at $9,909.

Finally, the average of the timecharter routes posted losses of $1,092 to settle at $7,054 on the week. The short-term outlook remains one of further weakness.

Handysize

The consecutive positive trend since mid-February came to an end, with the overall Handysize Index (BHSI) declining from midweek. Rates from the Continent moved sharply lower, with limited cargo support, whilst some market players chose to move cargoes by using own tonnage.

Volume was described to be thin in both East Coast South America and the US Gulf. This was especially the case from the second half of the week onwards, with stems reportedly being cancelled or pushed back due to delays or closure at load-ports.

A 34,000dwt vessel open Rotterdam was fixed at $10,000, basis delivery Rouen, for moving grains to Algeria.

A 32,000dwt ship was fixed from Southwest Pass for a trip with petcoke to Huelva in the early part of the week at $9,500.

The movement in the Pacific was not significant this week, with the market showing a similar trend as the Atlantic Basin.


TANKER MARKET REPORT

VLCC

Activity in the Middle East picked up this week and rates initially fell. However, by the end of the week owners had reclaimed losses and the overall week-on-week position was steady. 280,000mt to the US Gulf, via the Cape to Cape routing, is rated at the WS88 level, while 270,000mt to China is at WS112.5.

The market for 260,000mt West Africa to China sank 25 points to high WS80s, before recovering to WS112.5.

Rates for 270,000mt, US Gulf to China, dropped over $2 million on weaker sentiment, before bouncing back on actual activity to $14.75 million region. Petrochina and Vitol both reportedly taking tonnage for this route.

Suezmax

The market for 130,000mt West Africa to the UK-Continent mirrored the VLCC action, with rates initially diving down 10 points to WS100, before rebounding to low WS120s. Upward pressure remains.

The rates for 135,000mt Black Sea to the Mediterranean have remained flat for the week at close to WS115, however, there is a firming sentiment.

On the 140,000mt Basrah to Mediterranean route, rates dipped 20 points to WS70 level early on. They have since recovered some of those losses to mid WS80s, and again, there is potential for the market to continue moving up.

Aframax

Rates for 80,000mt Ceyhan to the Mediterranean are now at WS165, down 10 points from a week ago. Rates in Northern Europe lost 20 points. 80,000mt Cross-North Sea is now in the low-mid WS160s range, while 100,000mt Baltic to UK-Continent is now at high WS130s.

Across the Atlantic, the market for 70,000mt, Caribbean to the US Gulf, fell 40 points to mid WS130s. 70,000mt US Gulf to the Mediterranean is now worth 35 points less than a week ago at WS120.

Clean

After last week's gains to high WS170s, the market in the Middle East Gulf to Japan trade for 75,000mt was more settled in the low WS170s. Frontline tonnage was today reported to have agreed WS170 for Daelim.

The LR1s followed a similar pattern, and after the market eased at the end of the previous week to high WS160s, rates have now consolidated in the mid WS160s.

In the 37,000mt UK-Continent to US Atlantic Coast trade, the start of the week saw rates soften to close to WS165. This was before a strong recovery, with WS185 being last fixed here.

Rates in the 38,000mt backhaul trade from the US Gulf to UK-Continent continued to fall, with the market losing a further 12.5 points to WS95 region and remains under downward pressure.

The 30,000mt clean cross-Mediterranean market continued its upward ascent to sit now at around WS220, representing a gain of almost 10 points this week.


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.

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