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Baltic Exchange Shipping Insights

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

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TANKER REPORT

VLCC

Rates in the Middle East Gulf for 270,000 tonnes to China have been steady at WS 41/41.25, while WS 37.5 was done to South Korea, although increased bunker costs leave owners struggling to maintain their TCE'S.

Going west, the market still sits at WS 17/18 region Cape/Cape for 280,000 tonnes to US Gulf. West Africa/China was steady at WS 43.

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There was a deal done at WS 46 but this was for an early position of end May. A voyage to WC India went at the equivalent of 260,000 tonnes at WS 45.

Occidental fixed US Gulf/WC India at $3.25 million. Shell paid $4.15 million for a Hound Point/South Korea run.

Suezmax

Improved volumes of enquiry saw rates in West Africa gain 7.5 points to WS 67.5 for 130,000 tonnes to UKCont. Black Sea rates are hovering at close to WS 87.5 for 135,000, with South Korea discharge paying between $2.7/2.8 million.

In the Mediterranean, S-Oil fixed Gesco tonnage at $2.45 million from Algeria to South Korea, while Irving agreed WS 59 for 130,000 tonnes from Sidi Kerir to Canaport.

Closer to home, Repsol took 'Nordic Thunder' at WS 69 for 140,000 tonnes from Sidi Kerir to Spain.

Aframax

In the North, Baltic rates for 100,000 tonnes gained 7.5 points to WS 80 region, while the 80,000 tonnes cross North Sea trade also firmed from WS 92.5 to low WS 100s, as a thinner tonnage list combined with uncertain itineraries and prospects for tonnage discharging enabled owners to capitalise here.

In the Mediterranean , a busier week saw rates firm with Chevron taking 'Seastar' at WS 100, while Lord Energy paid WS 105 from Black Sea, representing gains of around 12.5 points for both areas.

The 70,000 tonnes Caribbean/upcoast market gained 10 points to WS 110, with potential for further improvement.

Panamax

Rates for 55,000 tonnes from ARA or Skikda to US Gulf were unchanged at WS 105 level.

Clean

The LR2 market for 75,000 tonnes from Middle East Gulf to Japan held in low WS 90s, while LR1s were hovering at WS110/112.5 for 55,000 tonnes to Japan.

Limited enquiry combined with plenty of tonnage in the 37,000 tonnes Cont/USAC trade saw rates ease from WS 137.5 to WS 125, before softening further to WS 120. Rates in the 38,000 tonnes backhaul trade lost 6.5 points to sit now at WS 85.


DRY REPORT

Capesize

Dramatic drops over the week for the big ships, with the hope of further improvements as the week began being dashed mid-week.

Ongoing unrest in Guinea and disruption to bauxite exports saw some vessels re-let on the market, prompting uncertainty with those vessels chasing rates lower, especially from Brazil.

As the week closed out, rumours circulated that Vale took a clutch of ships in the low $17.00s for June dates from Tubarao to Qingdao. Further north, there were rumours of weaker transatlantic rates negotiated, and timecharter levels slipped further down.

In the East, even though bunker rates in Singapore kept firming, voyage rates came off sharply, seemingly as some owners preferred to stay local rather than ballast towards South Africa or Brazil.

The major Australian miners were largely present for most of the week, with rates dropping to the low $7.00s, compared to the mid $8.00s seen the previous week, despite bunker prices continuing to rise in Singapore and China.

However, today there is talk of Rio Tinto fixing for early June dates at $7.45, and others taking tonnage at $7.65 region, so perhaps a floor has been found.

As paper values took a hit this appeared to side-line operators.

Louis Dreyfus was confirmed taking the 'Ianthe' (180,018 2009) for seven to nine months, trading with 5-15 June delivery Nagoya, at $20,650 daily, but the rate was said to be agreed the week ending 11 May.

Panamax

Despite being an active week with plenty of fixing, the index remained relatively flat throughout the week. Atlantic rates slipped, while Pacific rates edged up slightly.

With more enquiry in the North Atlantic, owners had an opportunity to cover, but at levels generally below last done, and even East coast South American rates softened at the beginning of the week, before recovering to levels similar to those seen last week, as several charterers took multiple ships for end May and early June stems.

There has been a big clear out this week, including the last remaining May stems, with some owners having to wait for slightly later cargoes to find cover.

Vessels in the North Pacific continued to achieve slightly improved levels from NoPac, although the volume of enquiry seemed to be slowing, whilst further south, rates appeared flat, as the mineral volume was matched by the healthy tonnage availability.

Period interest continued, and rates are still strong in spite of the flat market, with Kamsarmax's fixing at around $13,000/low $13,000's for short periods in the Pacific.

Supramax

It was another week of opposites in this sector. The Atlantic remained in the doldrums, whilst in contrast, the Asian market remained on a firm footing.

Bearing this in mind, the period market saw increased activity, with an Ultramax 63,000-dwt, open Ulsan, booked for three to five months period, in the mid $13,000s, and a 57,500-dwt open Chiba concluded for three to six months, trading at $12,750.

The Atlantic saw a very lacklustre week. The impact of minimal fresh enquiry from US Gulf and East coast South America saw rates slide.

A Supramax was rumoured to be covered from US Gulf to West coast Central America at around $17,000, whilst from South America, a 56,000-dwt was fixed delivery Recalada for a trip to Ireland in the mid $13,000s.

The Mediterranean-Black Sea market also saw very limited demand and an increased number of vessels becoming available.

More cargo appeared in the Asian sector this week and rates pushed up. A 63,500-dwt open Singapore was fixed at $18,000 for a trip via Indonesia to India.

There was also increased activity in the nickel ore trades. A 56,800-dwt open South China was booked via the Philippines to South China at $12,500, option redelivery North China at $13,000.

NoPac business was plentiful and a 53,400-dwt open Japan fixed in the upper $12,000s for a trip redelivery SE Asia.

Comparatively little was seen from the Indian Ocean, but a 61,100-dwt was reported booked delivery Maputo for a trip redelivery Singapore-Japan at $12,500 plus $250,000 ballast bonus.

Handysize

Both the Atlantic and Asian markets remained largely flat throughout the week, with little activity reported.

The overall Handy index stayed in the positive zone, with minimal improvement on any routes.

From East coast South America, a well-described 43,000-dwt was booked for a trip to Iraq at $13,500, plus a ballast bonus of $350,000.

A 38,000-dwt open Tampa was fixed for a trip via Panama City to redeliver in UK-Continent range at $11,000.

In the East, a 34,000-dwt achieved $10,000 basis on delivery in Ho Chi Minh for an Indonesia round trip, and a similar-sized open CJK, was fixed for a trip via CIS to China at $9,200.


NOTICE

Baltic Exchange training courses

On 25-26 June the Baltic Exchange will be holding its Freight and Derivatives and Shipping Risk Management course in Singapore. The course provides an overview of risk in the shipping business, with topics covered including freight rate risk management, derivative instruments, freight rate options, bunker and financial risk management, ship price risk, Value at Risk and credit risk.

For more information, visit: https://tinyurl.com/ycpchvcm


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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