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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 were unchanged at WS 55 for 270,000mt from the Middle East Gulf to both China and Singapore, whilst for the US Gulf, Equinor paid WS 20 Suez/Suez for 280,000mt from Basrah.

West Africa to China was up slightly, with Unipec paying WS 55, basis 260,000mt.

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Market voices on:

US Gulf to South Korea went at $4.85 and subsequently 5.0 million.

Suezmax

West Africa was steady at WS 72.5 for 130,000mt to UK-Cont, and the Black Sea saw rates holding at WS 87.5 for 135,000mt, with South Korea paying $2.9/3.0 million.

Petroineos fixed Algeria to Fos at WS 82.5 and ENI agreed WS 77.5 for Libya/UK-Cont, both on 130,000mt. UML reportedly paid $2.9 million for Ceyhan to Qingdao.

Aframax

In the Mediterranean, rates eased 7.5 points. UML paid WS110 from Ceyhan, and the Black Sea fixed between WS 100/105, basis 80,000mt.

Baltic rates gained 2.5 points to WS 75 for 100,000mt, while the 80,000mt cross-North Sea market rose to WS 107.5.

The Aframax market in the Caribbean lost almost 20 points before rates for 70,000mt from Venezuela recovered slightly to WS145/150.

Panamax

The ARA to US Gulf market was steady at WS 125 for 55,000mt.

Clean

In the 75,000mt Middle East Gulf to Japan trade, rates held in the very high WS 90s with 55,000mt fixed around WS 100 and WS 102.5.

The 37,000mt Cont/USAC trade dropped 25 points to WS 120, while the 38,000mt backhaul firmed to the low WS 90s.


DRY BULK REPORT

Capesize

The Capesize market fell sharply across all areas with the positive sentiment for the fourth quarter being eroded.

In Asia, the west Australia/China route remained fairly active but lacked a full set of miners in the market during the week. Rates dropped a dollar in three working days, and for now held at $7.50 for end September.

Activity in others was minimal and timecharter rates were barely holding in the high teens depending on size and age. Brazil again remained slow, with a plentiful supply of ballasters for nearby liftings. Rates dropped below $20.00s for the run to China, with an end September-early October cargo fixed on a Newcastlemax at $19.50, basis Tubarao load.

Further north, a 180,000dwt 10% cargo fixed from Ponta da Madeira to Rotterdam at around $7.10 on a ship coming from Tarragona. Transatlantic rates slumped as the week closed out and more enquiry slowly appeared with timecharter rates in the low teens. Fronthaul rates were largely holding, with some suggesting voyage equivalents were nearer the mid-to-high $30,000s.

Panamax

Overall, a generally flat market remained last week despite the pressure from a falling paper market and slashed Cape rates.

Transatlantic enquiry slowed, especially in the far north, and some vessels fixed short trips in order to reassess later.

EC South America saw rates improve slightly for end September positions due to lack of tonnage, but brokers remained cautious for October stems which so far have been less active. The North Pacific appeared more subdued with charterers seeing evidence of a build-up of tonnage and holding off for now.

However, further south there was some stronger numbers paid as charterers needing prompt tonnage were forced to improve on last done. Weather delays later in the week, combined with fresh enquiry, appear from Indonesia and Australia, adding to a bullish sentiment.

There was a steady amount of period trades concluded throughout the week underlining this positive sentiment. Short period rates for standard Kamsarmaxes were hovering in the high $13,000s.

Supramax

A mixed week with some areas making gains, whilst others had support.

Period trading was limited with a gap widening between owners and charterers, but brokers suggested that well described Ultramaxes were fixing one year periods in the low teens.

Activity levels varied in the Atlantic with the US Gulf trading sideways, but tighter tonnage supply from EC South America and the east Mediterranean.

Rates firmed during the week and a 56,000dwt vessel was rumoured fixed for an EC South America/Mediterranean trip at $18,000.

From east Mediterranean a 61,000dwt fixed delivery Canakkale prompt via Kavkaz, redelivery South Korea at $22,500. A slow start to the week in Asia but activity picked up midweek with a little more demand from Indonesia and Australia.

A 63,000dwt open CJK was reported fixed for a coal run via east Australia to south China at $12,000. Limited activity from the Indian Ocean, but Ultramaxes were in the mid-teens for trips from the Arabian Gulf to the Far East.

Handysize

The overall Handy index stayed in positive territory last week. Brokers noted more cargoes in the US Gulf with the tonnage list still tight.

EC South America improved further, whilst the Pacific market also picked up significantly from midweek.

A 43,000dwt open south Brazil was booked for a trip to the Persian Gulf-Singapore range at $14,000 plus a $400,000 ballast bonus. Another 35,000dwt vessel was covered from Santos to west Mediterranean at $14,500.

A 38,000dwt vessel moving clinker was paid $13,000 from Bizerte to Abidjan.

From the east, two 28,000dwt vessels were fixed via Australia at mid-$8,000s, basis Singapore to the Far East, and high $9,000s, basis Indonesia to Southeast Asia.


FREIGHTOS BALTIC CONTAINER REPORT

Transpacific prices are still buoyant, but there are indications that prices will level off rather than continue their recent spectacular trajectory: China-West Coast up 290%, China-East Coast up 193% from six months ago.

Ocean freight prices at a high. At $2,354 China-West Coast rates are 58% on this time last year (with China-East Coast prices 52% up).

In fact, at $1,735/FEU the Global Container Index is at its highest point since its beginning (July 5, 2017).

As we've seen in the past Septembers, importers are caught in a squeeze stocking up for Thanksgiving in advance of the Golden Week shutdown.

Space is currently very tight for China-US shipments, operating on a 3-4 week backlog and some shipments are getting rolled.

Furthermore, demand is still being driven by tariffs on US imports. Many importers will be anxious to get orders in and shipments out before a potentially imminent third round of tariffs on Chinese imports takes effect.

General Rate Increases (GRIs) have been announced for 1 October and 15 October, and more Bunker Adjusted Factor (BAF) increases are in the pipeline, so, for carriers, the outlook for prices should be good.

However, looking forward, carriers are concerned about demand levels after Golden Week. There are already indicators that the planned 15 September GRI will not have the same impact on prices as its recent predecessors.


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.