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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

In the Middle East Gulf, enquiry slowed and rates eased to WS 93.75/94 for 270,000mt to China.

Going west, 280,000mt to the US Gulf was fixed three points higher at around WS 43 Cape/Cape.

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West Africa to China basis 260,000mt lost eight points to WS 89/90 region. US Gulf to South Korea went at $8.4 million.

Fuel from Rotterdam to Singapore was fixed at around $5.9/6.0 million.

Suezmax

West Africa gained 7.5 points to WS 120 for 130,000mt to UKContinent, aided by firming Mediterranean and Black Sea markets.

Black Sea sits at WS 155/160 for 135,000mt to the Mediterranean up from WS 130 the previous week and South Korea discharge paid $4.5 and subsequently 4.85million.

Aframax

Healthy tonnage availability saw rates for 80,000mt in the Mediterranean ease 45 points, with Ceyhan load fixed at WS 120, Black Sea fixed at both WS 135 and WS 125.

Baltic rates for 100,000mt dropped 15 points to WS 95, with 80,000mt cross North Sea assessed 12.5 points lower at WS 120.

In the Caribbean, rates eased 10 points to WS 237.5/240 for 70,000mt from Venezuela to the US Gulf.

Clean

Status quo was maintained in the 75,000mt Middle East Gulf to Japan trade at WS 120, with the market for 55,000mt marginally softer at WS 127.5 region.

Healthy enquiry and reduced tonnage availability saw levels in the 37,000mt Continent/USAC trade firm 37.5 points to low WS 150s, while the 38,000mt backhaul trade from the US Gulf fell 12.5 points to WS 122.5.


DRY REPORT

Capesize

It was a brutal week for the big ships as rates tumbled on all routes.

A BHP Billiton derailment in West Australia sparked fears of a shortfall in shipments leaving the field clear for others to drive rates lower.

Latest reports suggest operations could resume early this week.

The West Australia/China run closed at $6.75 compared to $8.30 paid Monday.

Timecharterer trading was negligible, with a report of a 175,000 tonner fixing at $14,000 for a NoPac round proving unfounded.

On Monday, the BCI NoPac round was assessed at $18,021. The market collapsed in the Atlantic, with Brazil/China cargoes fixed around $16.00 to $17.00, while charterers aimed to fix at $11.00, basis Saldanha to Qingdao.

In the North Atlantic, the divergence in rates between transatlantic and fronthaul was quickly narrowed, as business fixed on voyage from St.Lawrence to the East at rates nearer to the low $20,000.

Transatlantic timecharter rates were barely in the teens. Physical activity triggered a major sell-off in paper, with November and December both losing over $7,000 daily in a week.

Panamax

A relatively uneventful week, especially when compared to the Cape market.

The Pacific was under pressure all week due to over tonnage, particularly on the early positions, with owners forced to lower their expectations to find cover.

Indian coal was one of the few routes to remain active, but rates dropped from around $13,000 for a Kamsarmax the previous week, to fixtures being concluded at $11,000 by the end of the last week.

The North Atlantic fared better, with a steady amount of new business gradually soaking up tonnage, sources suggested that voyage rates had been showing improved returns than the implied timecharter levels.

South America was less active than the previous week, but rates remained steady.

Period fixing was sporadic and rates have eased in line with falling FFA values, with a modern Kamsarmax fixed for one year at below $13,000.

Supramax

It was another negative week on the BSI as pressure remained on rates in the Asia arena, but with some resistance evident.

There was limited period action, but an Imabari 63 open North China fixed for a year in the low-mid $13,000s.

Overall, Atlantic routes were again negative, but more enquiry from the US Gulf could reverse the trend.

A 55,900dwt open US Gulf, fixed for a petcoke run to India in the mid $20,000s.

There was limited action from East Coast South America, although an Ultramax fixed for a trip to the Arabian Gulf at $15,250 plus $525,000 ballast bonus.

From the East Mediterranean, a 58,000dwt was fixed from Marmara for a trip via the Black Sea to West Africa in the mid $17,000s.

The Asian market remained in the doldrums, a 57,700dwt fixed Davao for a coal run via East Australia/China at $9,500.

For NoPac, a 57,000dwt was fixed delivery CJK for a trip via the West Coast, redelivery Bangladesh, at $9,500 and a touch more steel moved from North Asia, as a 56,000dwt fixed South Korea, via CIS, to Thailand at $7,000.

Handysize

The BHSI dropped on early October levels, losing the gains made since mid-October. Rates remained weak in both basins, with limited activity and fixing mostly on private terms.

A large Handysize vessel, open Port Arthur, fixed to Upriver, in the mid $15,000s. A 32,000dwt went from North Brazil for a trip with concentrates, to PMO, with a minimum 45 days at $15,000.

A 28,000dwt was reportedly booked from Ghent for two to three laden legs at $10,000 with Atlantic redelivery.

Similarly, a slowing in Supramax trading had a knock-on effect for Handysize vessels in the Pacific, combined with slow trading after Deepavali in Singapore last week. There were still period takers in the East, with a 32,000dwt fixing from North China for four to six months, but the details remained unclear.

A 38,000 tonner open in the Philippines, fixed for a round trip with concentrates, via East Australia, at $10,300.


FREIGHTOS BALTIC CONTAINER REPORT

Some ocean carriers pulled their 1 November General Rate Increases (GRIs), but, with sailings heavily booked, further rounds of GRIs are expected on 15 November and 1 December.

Depending on the outcome of the US and Chinese President's upcoming negotiations, there may be more trade tariffs to come, and therefore no let-up in high transpacific pricing.

Transpacific pricing continued an extended run of 18-month highs. China-West Coast prices were above the $2,000 mark for the 13th week in a row (the last time it breached this mark was the week before Chinese New Year in 2017).

Similarly, the China-East Coast prices breached the $3,000 mark for the 14th straight week.

Peak season alone can't explain these high prices, as proven last year, when prices actually fell through peak season.

The main reason is that many shippers are trying to stock up before the latest tranche of China trade tariffs increases from 10% to 25% on 1 January.

This means that prices are likely to stay high well into mid-December.

If President Trump holds good on his threat to slap a tariff on all of the remaining $257 billion worth of imports after his G-20 meeting with President Xi (late November), then expect transpacific prices to stay high until well after Chinese New Year.

The Freightos Baltic Indices reflect weekly spot rates for 40-foot containers based on 12 to 18 million price points collected every week on 12 main shipping trade lanes.

The data includes a headline index - the FBX Global Container Index (FBX) - a weighted average of the 12 underlying route indexes. This data is published every Sunday. See www.balticexchange.com/market-information/containers/

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.