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Baltic Exchange Shipping Insights
Marginal gains in the ME Gulf market, with rates for 270,000mt to China paying around WS 54. For USG discharge, ENI paid WS 26.5 Cape/Cape for 280,000mt up over six points and there is now talk of Petronas having paid WS 28.
In West Africa, CNOOC agreed WS 56 for 260,000mt to China, up six points from a week ago. In the western hemisphere, $4.85 million was fixed by GSC for USG to Korea and Pacific Commerce for Covenas to China.
In the North Sea, Total covered a Hound Point/South Korea trip at $4.2 million, while Unipec fixed ship to ship Southwold to China at $3.7 million.
Tight tonnage avails pushed rates up to WS 95, before settling back to around WS 92.5 for 135,000mt from the Black Sea to the Mediterranean.
Korea discharge was fixed at $2.8 million and WC India went at $2.1 million. In Nigeria the market for 130,000mt to UKC peaked at WS 75 before easing back to close to WS 70.
In the Mediterranean, rates for 80,000mt were both voyage and date dependent. BP paid WS 120 from Ceyhan before easing to close to WS 117.5 with the Black Sea at similar levels.
In the Baltic, as tonnage built up rates crashed 35 points, with the market now at WS 77.5 for 100,000mt. While for 80,000mt cross North Sea rates also fell to WS 105 level, which is 21 points less than a week ago.
An active week in the 70,000mt Caribbean and EC Mexico/upcoast market saw rates climb from WS 90 at end of last week to now nudging WS 117.5/120 level.
ARA/USG rates for 55,000mt firmed from low WS 100s to WS 110. North Spain load was fixed at WS 115 as positions tightened, with a firmer Caribs market enticing owners to stay local rather than ballast across.
There was little change for ME Gulf to Japan trade, with 75,000mt holding around WS 101/102 region. A surfeit of tonnage in the LR1 market saw rates ease from WS 115 to WS 107.5 level.
The 37,000mt Cont/USAC market has been under pressure all week and rates slipped about 13 points to WS 100 and it was a similar story in the 38,000mt backhaul trade which lost a further 10 points to sit now at WS 70.
Vale dominated the news for the big ships, with reports Brazilian miners took 20 ships, or more, for August positions from Tubarao to Qingdao.
Some were concluded the previous week, but rates paid as the week closed out were in the low $24.00, but without brokerage.
Others in the market with cargoes to move finally started taking tonnage, with rates rising to $24.80 for end August-early September positions.
As rates climbed, more owners were prepared to commit to the Brazil market.
Further north, there was fresh Atlantic inquiry, and with tonnage in tight supply, there were those expecting potential gains.
As the week closed out, transatlantic cargoes were fixed on voyage basis equating to the upper $20,000s to around $30,000 daily, depending on delivery and redelivery.
In the East, only one of the Australian miners regularly took tonnage, with Rio Tinto paying a few cents shy of $10.00 for 170,000-tonne 10% cargoes from Dampier to Qingdao.
Fresh business was quoted on the BCI C5 run today, with reports that a charterer paid over $10.00, but this could not be confirmed.
With paper values very strong, period interest was well supported, especially for short period.
A 2014-built 181,000-tonner open Qingdao, went to Jera for six to eight months trading at $28,000 daily or a tick under.
Rates came under pressure across all regions, and even NW Europe/Baltic, which had been the mainstay of the Atlantic market.
Owners/operators with ships who opened there early in the week achieved premium rates for the short runs, but cargo volumes have shrunk, and not been replaced.
Rates, depending on the trip, ranged from the high teens and reached $20,000 daily early in the week for a Murmansk/Israel trip.
There was a distinct lack of cargo from the EC US, USG, NC South America and West Africa, with Kamsar out of action due to maintenance.
Rates dropped sharply for the longer rounds, with a 76,000-tonner fixed for end August delivery in the USG for a trip with grain to Skaw-Gibraltar at $12,800 daily, plus a $280,000 ballast bonus.
Further South, EC South America trading also slowed, and rates slipped here by more than a $1,000 daily, on the rate, with an expectation of further cuts.
Rates for Panamaxes for end August were around $15,000 daily, plus a $500,000 bonus.
Too many early ships in the East left the field open for charterers to push rates sharply lower.
An 87,000-tonner open Fukuyama, 8 August, was said to have agreed $9,000 daily for a trip via Australia to Taiwan.
A 74,000-tonne Hudong type, open CJK, allegedly fixed a NoPac round with petcoke at a rate in the low $9,000s and some even suggested under $9,000 daily.
Period interest for now appears off the table.
It was a relatively slow week, with only a few areas making small gains. Period activity remained scarce, but a 55,000-dwt open North China was fixed for three to five months trading at $11,750.
The Atlantic market generally traded sideways, but the Mediterranean- Black Sea bucked the trend with some healthier rates achieved.
An Ultramax was linked to a trip from the Baltic to West Africa in the $18,000s, whilst from the Mediterranean, another Ultramax was rumoured linked to a fronthaul, with delivery Canakkale, at around $22,000.
As the week came to a close a little more activity was seen from the USG, a 56,800-dwt was fixed in the high $16,000s for a trip to the Mediterranean and a 55,600-dwt was fixed delivery NC Brazil, for a trip with alumina, redelivery Iceland, at $16,700.
EC South America was flat with limited action.
The Asian market had a split with the North, lacking support, while further south, more enquiry was seen.
A 57,100-dwt was reported fixed delivery Jingtang for a trip with metcoke to EC India in the mid-$8,000s.
In contrast a 56,000-dwt was fixed delivery Surabaya, for a trip via Indonesia, redelivery mid China, at $13,000.
The Indian Ocean area was also largely unchanged, with a 50,000-dwt fixed for a trip delivery Mina Saqr, via the Arabian Gulf, redelivery India, with limestone at $12,750.
Overall, last week saw little improvement and the BHSI continued to fall. Rates from the USG and EC South America were weaker, while the Pacific market was also largely flat.
In the Atlantic, a 31,000-dwt 2001-built, open in the Skaw, was fixed for a trip via the Baltic to the East Mediterranean with timber and general cargo at $10,750.
A 32,000-dwt 2007-built was fixed from Canakkale for corn, via the Black Sea to Italy, at $10,350. A larger-sized handy was reportedly failed for a similar run, with steels at $11,500, delivery Tuzla in early August.
From EC South America, a 34,000-dwt 2012-built open spot in Praia Mole was fixed at $12,500, basis Bahia Blanca, for coastal business.
A 30,000-dwt was fixed from NC South America to the East Mediterranean at a rate in the $8,000s.
In the East, a 31,000-dwt 2012-dwt open Jakarta in early August, was fixed to run via Geraldton, redelivery in South Korea, at $8,900.
A 32,000-dwt 2009-built open Kuala Tanjung was booked for a trip via West Australia to EC India at $9,500.
A 29,000-dwt 2012-built open South China was fixed basis passing CJK delivery to move fertilisers via South Korea to Thailand at $8,250.
FREIGHTOS BALTIC CONTAINER REPORT
July saw several price rises on the China-US lanes: start of month and mid-month General Rate Increases (GRI), emergency bunker surcharges and peak season surcharges. And, somewhat surprisingly, rates have held.
- China-US West Coast rates are 38% on four weeks back and 23% up on eight weeks ago.
- China-US East Coast rates are 20% on four weeks back and 14% up on eight weeks ago.
Carriers have taken this to heart. 1 August GRIs are being implemented in the $400-$700/FEU range.
Freightos CEO, Zvi Schreiber comments:
"China-US ocean freight prices are holding in part because carriers have started cutting services making capacity tighter. To some extent, too, they are resisting the temptation to undercut competition and are instead standing firm with their prices. The pricing race to the bottom is not sustainable and carriers are making a concerted effort to withstand the downward price pressure."
BALTIC EXCHANGE NON PUBLISHING DATES
Due to Singapore public holiday (National Day and Hari Raya Haji), the Baltic Exchange will not be publishing its BEP-Asia, BES-Asia and BITR-Asia on 9 and 22 August.
BEP-Asia, BES-Asia and BITR-Asia will be published again on 10 and 23 August.
This report is produced by the Baltic Exchange.
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For daily freight market reports and assessments, please visit www.balticexchange.com.
- The report is also available online at bt.sg/baltic.