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Baltic Exchange Shipping Insights

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

DRY BULK REPORT

Capesize

The Capesize market this past week looks to have come off life support and found some improved sentiment.

The week began rather ordinary before surging on Tuesday prior to the index publishing.

Improved South African loading options and activity out of Brazil were cited as the cause.

Countering that, Vale announced that same evening that it forecast cuts to iron ore output due to Coronavirus lockdowns.

The market remains a touch above OPEX levels, with the Cape 5TC closing the week at $5,949.

Cargo supply remains weak, while Covid-19 fallout looks set to increase over the coming weeks.

The West Australia to China C5 route was at the centre of Tuesday's lift. It opened the week at $4.223, lifted to $5.395, to close out Friday at $4.923.

A wide spread of earnings has now opened between the Pacific Basin C10 at $7,954 and the Atlantic Basin C8 at $4,620.

The Baltic Capesize Index (BCI) lifted this week out of negatives, from -91 to 319, illustrating the improved situation.

Panamax

The Panamax market roused in the early part of the week, supported in tandem with FFA gains witnessed.

The Pacific has been largely driven by strong demand out of the North Pacific. That has favoured Kamsarmax vessels, which have been fixing at rates ranging from $7,000's to $8,000s, depending on delivery.

South America continued to be the driving force in the Atlantic.

However, there were a few signs this was starting to be eroded somewhat by the plausible Ultramax arbitrage opportunities.

Nonetheless, decent types were still able to achieve midweek rates in the mid- $9,000's, some up to $10,000 with Southeast Asia deliveries.

Tonnage supply appeared to be building in the North Atlantic, as transatlantic demand slowed.

There was very little period talk, but a modern Post Panamax fixed for thirteen to fifteen months, delivery China, for a discounted rate of $4,000 for first 60 days and $8,500 thereafter for balance of period.

Supramax/Ultramax

The influence of the Covid-19 effect was dramatic over the last week, with the Baltic Supramax Index (BSI) losing over 100 points.

Period activity remained quiet, but a 62,000dwt vessel, open Taiwan, was rumoured fixed for four to six months in the mid $9,000s.

Brokers said the Atlantic lacked impetus, certainly from the US Gulf, with tonnage availability growing.

However, in contrast, the South Atlantic saw increased activity.

A 63,300dwt vessel fixing delivery Recalada trip, redelivery Morocco, at $10,000.

For fronthaul business, Ultramax vessel sizes were getting in excess of mid $11,000's, plus over $150,000 ballast bonus, redelivery Singapore-Japan.

The Asian arena similarly suffered, with little fresh cargo and prompt tonnage availability across the region building.

A 52,000dwt ship fixing delivery Singapore trip, via Indonesia, redelivery Taiwan, at $3,100.

Further north, an Ultramax was fixed delivery Busan via the North Pacific, redelivery Bangladesh, at around $7,000.

Little was seen from the Indian Ocean, but a 56,000dwt ship was fixed delivery Paradip, redelivery China, at $4,700.

Handysize

The slow movement and weakening sentiment from last week further continued, especially in the Atlantic.

Pressure on rates remained on more spot tonnage being built up, whilst the overall activity was still minimal in East Coast South America and the US Gulf.

However, towards the end of the week, some brokers saw slightly more cargoes in the market for second-half April dates.

A 34,000dwt ship was fixed for moving grains from Rouen to the West Mediterranean at $7,100. A 29,000dwt ship, open in Constanza, was fixed for a trip via the Black Sea to Morocco at $6,800.

In the East, a 44,000dwt ship, open Singapore, was fixed for a trip via Indonesia to China at $2,500, and a 32,000dwt ship, delivery in Fujairah, was fixed for a trip to Taiwan at $4,500.


TANKER MARKET REPORT

VLCC

Activity in the Middle East continued apace with owners firmly in the driving seat. 280,000mt to the US Gulf via the Cape to Cape routing is rated at around WS140.

This is after peaking at WS145 region, up just over 27 points from a week ago. 270,000mt to China was fixed at WS210, before settling close to WS200.

This contrasted with WS160 at end of last week.

The market for 260,000mt, West Africa to China, firmed from low WS150s, to as high as WS197.5, before easing back to WS187.5.

270,000mt US Gulf to China ended last week around $15.6 million, but has seen renewed activity, with rates now hovering between $18.5/19million level.

Suezmax

The market for 130,000mt West Africa to the UK-Continent followed a similar trend to the VLCCs.

The start of the week saw Petrogal taking Lemos tonnage for a run to Portugal at WS183.5.

Thereafter rates came under downward pressure, as tonnage built.

Last seen here was WS170, agreed by Exxon to Europe, with US Gulf, at WS165.

Rates for 135,000mt Black Sea to the Mediterranean started the week in the mid WS160s, they presently sit in the low-to-mid WS170s.

On the 140,000mt Basrah to the Mediterranean route, rates gained 40 points to WS137.5/140 region.

Aframax

Rates for 80,000mt Ceyhan to the Mediterranean are at WS165, but with increased tonnage availability, could come under downward pressure.

In Northern Europe, 80,000mt Cross-North Sea has been steady in the mid WS150s.

100,000mt Baltic to the UK-Continent is now at WS120, down 10 points from a week ago.

Across the Atlantic the market for 70,000mt Caribbean to the US Gulf, regained five points to sit now at WS140.

70,000mt US Gulf to the UK-Continent-Mediterranean firmed 22.5 points to WS150.

Clean

The market in the Middle East Gulf to Japan trade for 75,000mt has been on an upward trajectory all week.

Rates are now around WS210, representing a gain of over 30 points from the start of the week.

The LR1s followed a similar pattern, firming from low WS170s to WS205.

One market which declined was the 37,000mt UK-Continent to US Atlantic Coast trade, with rates now in the very low WS170s.

This is in contrast to low-to-mid WS180s earlier in the week.

Rates in the 38,000mt backhaul trade, US Gulf to UK-Continent, continued to fall.

However, following the market bottoming out at WS80, there was talk of a charterer subsequently struggling for tonnage and the feeling is slightly firmer here now.

The 30,000mt clean cross-Mediterranean market stalled and presently is assessed around WS212.5, off around four points from earlier in the 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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