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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

After a week of bounce momentum the market appears to have stalled out once again.

The Capesize 5TC has more than doubled since last Friday and is now pricing at $4140 on the back of owners baulking at recent unreasonable lows.

Atlantic routes, mainly fronthaul (C9) and Brazil to China (C3), have shown surprising resilience lifting in spite of dreadful fundamentals.

A small boost of cargo has helped to keep the fronthaul route ticking over settling the week up +495 to $14730.

The transatlantic trade has not shown any significant improvement with talk of force majeure now being banded around out of Colombia.

Bunker rates were seen to strengthen significantly this week assisting the bounce, as most routes had little fat left to absorb an increase in costs.

The C5, being very sensitive to bunker levels, increased from $3.941 on Friday to a high of $4.782 before being down today to $4.541.

Panamax

The Atlantic Panamax market this week yielded little joy for owners, despite improved fixing activity during the second half of the week.

Pure tonnage count far outweighed demand in the North resulting in easier rates, meanwhile out of South America the market here was slow to get started this week with wide bid/offer spreads.

This appeared to level off by mid-week, with better sentiment for second half June arrival dates.

Typically, for an 82,000dwt, the mean rate pitched at $11,500+$150,000 ballast bonus.

By contrast, in Asia, the market here fared better and started strongly with healthy demand seen particularly from Indonesia and the NoPac.

Mineral from Australia joining the party as the week drew to a close, NoPac and Australian rounds regularly featured around the $7,000 mark and with support emanating from ECSA there was an improved - albeit small - amount of optimism in the Pacific basin.

Ultramax/Supramax

Overall a positive week for BSI despite widespread holidays.

Period activity came back into the arena with a 63,000-dwt open Philippines fixing at $8,500 for 6-9 months trading.

The Atlantic started the week on a sideways trend.

But as the week progressed, many said a more positive feel was appearing in many areas except from the US Gulf, which lacked fresh enquiry.

From the Mediterranean, a 56,000 was fixed delivery Turkey for a grain's run to China at $12,000.

The Indian Ocean remained firm with strong demand for vessels, an Ultramax fixing delivery east coast India for a trip to China at $9,000 plus $150,000 bonus - and a 56,000 covering a trip delivery Singapore via east coast India redelivery China in the low $9,000s.

Further east a 63,000 fixed delivery Vietnam trip via Indonesia redelivery Kosichang at $8,500, whilst a 56,000-dwt fixed delivery Singapore trip via Indonesia to China in the mid-low $7,000s.

Handysize

The BHSI continued to improve in the positive territory this week. Limited activity reported from the US Gulf, Continent and Mediterranean - but east coast South America showed firming signs throughout the week with tick more cargoes out in the region.

There was also talk that all foreign-flagged dry bulk vessels arriving at Recalada pilot station area will have to comply with a 14-day quarantine period.

It was not clear how the new restriction would be implemented, but ballasters were certainly discussing higher numbers with the charterers.

A 28,000-dwt was fixed from Recalada for a trip to east Mediterranean at $6,000 and a 35,000-dwt open Alexandria 28 May was fixed for a trip to the US Gulf at $4,000 for the first 40 days and $6,000 thereafter.

In the east, positive sentiment lended support with the Pacific routes indices further climbing.

A 32,000-dwt was fixed from north Vietnam for a clinker trip to China at $4,000.

Clean

Overall it was another very disappointing week for owners as the slide in rates continued.

In the Middle East Gulf, 75,000mt to Japan has now been fixed at WS120 - representing a loss of over 50 points from the assessment at the start of the week.

In a similar vein, LR1s are hovering in the low WS130s for 55,000mt, equating to a drop of 30 points plus over the week.

In the 37,000mt UKC to USAC trade rates began the week just below WS130 and WS105 has now been agreed.

With a long weekend approaching - and sentiment weak - rates remain under significant downward pressure.

The same gloomy scenario played out across the Atlantic with the 38,000mt backhaul trade from US Gulf to UKC falling around 17 points to WS70.

The 30,000mt clean cross-Med trade provided the only modest encouragement for owners here with rates regaining some lost as they recovered to mid WS130 representing an improvement of 20 points over this week.


TANKER MARKET REPORT

VLCC

There has again been a good volume of fixtures in all areas this week, with charterers able to capitalize on weakening sentiment.

In the Middle East Gulf, rates for 270,000mt to China softened about eight points to WS50 level and for 280,000mt to USG via the cape/cape route rates are now assessed at low WS30s - three points lower than a week ago.

In west Africa, rates fell a modest four points to WS52.5 level. In the Gulf of Mexico, a few deals were seen with each one slightly lower than the next.

For 270,000mt USG/China rates are assessed at just under $5.9m, down from $6.1m a week ago, although there is a report today of Occidental fixing at $5.75m.

Suezmax

Rates in this sector in the West are now about 12% lower than a week ago, with 130,000mt Nigeria/UKCont rated at WS72, and 135,000mt Black Sea/Med at WS76.5.

In the Middle East rates have eased slightly with 140,000mt to the Med down about 3 points at the WS37 mark.

Aframax

There was more downward pressure on this sector.

In the 80,000mt Ceyhan/Med route, rates slipped a further nine points to high WS80s while in Northern Europe, 80,000mt Cross-North Sea is now about 10 points lower than a week ago at WS111.

For 100,000mt Baltic/UKC, rates here remained flat at WS95-97.5 level.

On the other side of the Atlantic a woeful tale bore out, with rates collapsing about 55 points (~35%) as 70,000mt Carib/USG is now rated at WS90 and 70,000mt USG/ARA is down to W88.


BATLIC EXCHANGE NEWS

SGX will be hosting Commodities Unplugged, a month-long webinar series (18 May to 12 June) to share insights into a post-pandemic view of commodity markets, and the macro opportunities offered from an increasingly financialised market.

The Baltic Exchange will be presenting on the following topics:

  • Update on Baltic developments and initiatives (Mark Jackson, Chief Executive): 16:00-16:30 Singapore time (SGT), 1 June 2020
  • Recent global turmoil and the implications for shipping (Andy Symonds, Senior Assessor - Freight Market Singapore): 18:30-19:00 SGT, 1 June 2020
  • Baltic LNG and LPG freight indices (Nadia Mirza, New Markets): 16:00-16:30 SGT, 2 June 2020

The full agenda and registration is available at: https://www.sgx.com/commodities-unplugged


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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