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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

Although the market in the ME Gulf to China had been steady in high WS 40s, there are now reports of WS 48, and subsequently, WS 47 being agreed. With this, brokers feel there is potential for further weakening.

Korea discharge went at WS 45 all basis 270,000mt cargo. Voyages to US Gulf are assessed at between WS 18/19 Cape/Cape for 280,000mt, although Exxon managed to fix AMCL tonnage at WS 15 Suez/Suez. West Africa/China was fixed at both WS 47 and WS 48.75 and Total fixed at WS 48.5 to WC India basis 260,000mt.

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In the US Gulf, trips to South Korea were covered at $4.8 million, while Occidental paid $3.6 million for WC India discharge.

Suezmax

Rates in the 135,000mt trade from Black Sea/Med eased five points to WS 85. And a run to Ningbo was fixed at $2.6 million. Chevron reportedly fixed 135,000mt from Caspian Pipeline Corporation to US Gulf at WS 57.5.

In the Mediterranean, Ampol paid $3.1m for Arzew to Brisbane, while Unipec agreed $2.65 million for Libya/China although it remains to be seen if this deal goes through in light of ongoing fighting.

Closer to home, UML took 'Meltemi' for 135,000mt from Ceyhan to UKC-Med at around WS 80. In West Africa earlier in the week, Angola cargoes which are attractive to ballasters from the East were being fixed to Europe at WS 60/62.5 level, but subsequently, sustained activity has seen rates improve, with the market now hovering at around WS 67.5 for 130,000mt to UKContinent with potential to firm.

Aframax

The start of the week saw a significant turnaround in the Mediterranean with rates jumping over 20 points to WS 120 level, with Black Sea at similar levels.

However, it appears the market has peaked, and UML subsequently fixed 'Neverland' at WS 115 for 80,000mt from Ceyhan, and there is now talk of WS 105 having been concluded from Black Sea. A very active week in the North saw rates climb 27.5 points to WS 102.5 for 100,000mt from the Baltic and the 80,000mt cross North Sea market, which is tight on tonnage with some ships tied up in short-term storage, gained 15 points to sit now at WS 115.

The 70,000mt Caribbean and EC Mexico upcoast eased five points to WS 137.5/140 level.

Panamax

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

Clean

In the 75,000mt from ME Gulf to Japan trade, rates eased a further 12.5 points to sit now at between WS 97.5/100. The LR1 market came under modest downward pressure easing 2.5 points to WS 112.5 for 55,000mt to Japan.

A less active week, combined with good tonnage availability, saw rates in the 37,000mt Cont/USAC trade ease five points to WS 110, while the 38,000mt backhaul market still languishes at WS 67.5.


DRY REPORT

Capesize

The Atlantic market improved this week, with increased activity from Brazil for July shipments plus a few June cargoes fuelling rate rises, with close to $20.00 rumoured paid.

Vale took a few July ships from Tubarao to Qingdao early in the week at rates in the low $18.00s, with others quickly following and pushing rates higher.

Further north, there was some increased activity, with tonnage still tight, but this market can swing either way very quickly. Timecharter rates for trips to the East firmed sharply, with a well-described 2014-built 181,000-tonner fixing from Ijmuiden for a trip via EC Canada or Trinidad at $35,000 daily. Transatlantic business was slower to emerge, but the rate from Puerto Bolivar/Rotterdam was still holding more than $10.00 and a cargo fixed from Port Cartier to Fos at $9.25, although the latter business was said to show around $18,000 daily.

With a holiday in Singapore as the week ended little was expected, but after a mostly flat week here rates on the key West Australia/China run closed out at $8.00, as FMG picked up three ships for end June loading from Port Hedland to Qingdao.

Timecharter rates also firmed, with an 11-year 181,000-tonner fixing basis South Korea delivery for a round voyage at $18,000 daily. Period trading was evident this week, with charterers eyeing still solid forward curves. A 2004-built 180,000-tonner open Jintang fixed for seven to nine months trading at $21,000 daily, while a 2016 Newcastlemax Imabari built reported for two years at $25,000 daily with Japan delivery.

Panamax

A somewhat strange week, which started very slowly following Posidonia, and ended with a holiday in Singapore. Activity from EC South America continued to dominate the market and rates improved particularly for nearby positions but not dramatically, with Kamsarmaxes now fixing just above $16,500 plus a $650,000 ballast bonus compared to $16,000 plus $600,000 ballast bonus at the end of last week.

Elsewhere in the Atlantic, front haul rates rose throughout the week with sufficient enquiry sustaining the gains from various load areas.

However, transatlantic rates softened as a lack of fresh business in the North resulted in owners dropping their ideas to find cover. The Pacific saw the recently firm market in the North falter, with rates sharply down from the $14,000 seen the previous week due to a lack of new business.

However, the SE Pacific remained very active, especially from Indonesia, with charterers forced to pay a premium for shorter duration trips, with ships delivering Singapore achieving $15,000 daily. Period interest continued, particularly for one year, with rates for standard types averaging in the $13,000s daily.

Supramax

US Gulf captured the spotlight this week in the Supramax-Ultramax pool. Rates moved sharply higher for the Gulf area with cargoes for late June dates lending support. Brokers also suggested that the benchmark for the EC South America market was set particularly high.

A short week in Singapore, with a national holiday on Friday and a China holiday coming, slowed activity in the Pacific towards the weekend. On the period front, a 61,000-dwt open South Africa was linked to a one-year period at $14,250. Another 63,000-dwt open in the Persian Gulf was fixed for a short period at a rate in the low $14,000s.

A 60,000-dwt and a 63,000-dwt, both open EC US, were fixed for a trip to the Continent at $18,500 and $16,500 respectively. A 63,000-dwt open in the US Gulf was booked to redeliver in Brazil at $18,000.

From EC South America, a trip to the Arabian Gulf or the Far East paid a rate in the $15,000s plus a ballast bonus of ranging from low to high $500,000 on an Ultramax, similar rates paid for standard Panamaxes on this route.

In the East, a 53,000-dwt open Philippines was fixed for a trip via Indonesia to South Korea at around $10,750. A coal trip via Indonesia to China ranged from the mid $11,000s to $13,000s on Supramax vessels delivery in Singapore. A 56,000-dwt open CJK was booked for moving steel to Southeast Asia at $10,500, while a long haul trip to West Africa was reportedly fixed on a 61,000-dwt at $9,800 for the first 60 days and $14,000 thereafter, basis North China delivery.

Handysize

Most market sources suggested from EC South America, larger-sized handy vessels were seeing improved offers, with more cargoes in the market for second-half June.

However, some were not fully convinced whether the upcoming cargoes would balance out the long tonnage list in the area. Rates for the US Gulf routes climbed further, but little was reported. In the Pacific, activity focused on the bigger sizes over the small handy vessels, brokers said.

A 38,000-dwt open Bahia Blanca was fixed to Brazil at $8,400. Two 37,000-dwt were fixed both from EC South America to the Mediterranean at $9,250 and $11,000. A 28,000-dwt open South China was said to have gone for an Australia round voyage at $8,600. A 36,000-dwt open Singapore was booked to run via Australia to Japan at $10,600.


This report is produced by the Baltic Exchange.

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