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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

A slower week In the Middle East Gulf saw rates ease four points to WS 90 for 270,000mt to China. Going west, 280,000mt to the US Gulf was assessed three points lower at around WS 40 Cape/Cape.

West Africa to China basis 260,000mt lost three points to WS 86. While US Gulf to China was fixed at $8.5 million.

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Suezmax

West Africa was steady at WS 120 for 130,000mt to UKCont. Uncertainty in the Turkish straits delays saw Black Sea/Mediterranean rates firm 15-20 points to WS 170-175 region for 135,000mt Mediterranean, with South Korea fixed at both $4.9 and $5.0 million.

Aframax

Improved volumes of enquiry saw rates for 80,000mt in the Mediterranean recover, with Ceyhan load initially fixed at WS 120.

Tightening tonnage resulted in Sidi Kerir being covered at WS 137.5 and Black Sea at WS 135 on a vessel ex dry-dock.

Baltic rates for 100,000mt held at low-mid WS 90s, with cargoes requiring short options paying WS 95. The 80,000mt cross North Sea trade was steady at WS 115-117.5. In the Caribbean, rates held at WS 235 for 70,000mt from Venezuela to the US Gulf.

Clean

Status quo was maintained in the 75,000mt Middle East Gulf/Japan trade at WS 120 with the market for 55,000mt marginally improved at WS 130.

After Exxon fixed 37,000mt Continent/USAC at WS 150, limited enquiry and healthy tonnage availability saw rates slip, with Shell then fixing at WS 140. The 38,000mt backhaul trade from US Gulf fell 7.5 points to WS 115, before a surge of enquiry saw rates firm to WS 135.


DRY REPORT

Capesize

After a cut throat couple of weeks, the market finally appeared to have found a floor and rates ticked up. Those analysts that predicted a strong fourth quarter have, as yet, offered few reasons for the dramatic fall.

The key trade from West Australia to China recovered to the low-mid $6.00s as the week closed out, up from the low of $5.30, but still adrift of $8.50 paid 10 days ago.

Similarly, Brazil/China rates continued to take a hit, dropping to around $15.00. Vale, during the week, took upwards of eight to 10 ships, but barely made an impression on the list of ballasters enroute.

However, there were signs that some owners were prepared to drop anchor rather than take rates that showed less than operating costs.

The North Atlantic also remained in the doldrums, with just a touch more business as the week closed out, but with some increase in rates after the recent debacle.

The Puerto Bolivar/Rotterdam rate closed out the week closer to $8.00 than $7.00, limiting trading on the fronthaul, with rates hovering around $20,000.

Supramax

The BSI continued to fall last week, especially the Asian routes. Some period activity was seen, with a 63,000dwt open CJK covered at $12,350 for five to seven months trading redelivery worldwide.

The Atlantic traded sideways, with limited activity from the Continent. The US Gulf saw a little more interest, a 58,000dwt vessel was rumoured fixed from here to the UK-Continent at $20,250, whilst a 55,000 tonner fixed to West Coast Mexico in the mid $20,000s.

The East Mediterranean remained positional, but some good numbers were seen as a 63,000dwt went delivery Greece, via the Black Sea redelivery Continent at $16,100. East Coast South America was steady, brokers said.

The Asian market remained slow, but as the week ended some suggested a floor was possibly reached, but with coal import restrictions into China a doubt remained.

A 63,000dwt fixed delivery Vietnam, via Indonesia, redelivery India, at $9,500.

Panamax

Many will have been relieved to see the end of an eventful week. With China apparently cancelling coal stems, there was uncertainty mid-week, with several ships failing on subjects from Indonesia.

However, this later proved to be the most active market in the Pacific, as owners sought to buy some time instead of ballasting. Despite an increase in NoPac stems, rates remained under pressure all week symbolised by the Steel Authority of India awarding a tender, 12 November, at $16.20 Australia to India, then a similar cargo three days later at $14.80.

Confidence in the South American market was also shattered in the second half of the week, with significantly lower rates concluded for early December dates. A modern Kamsarmax fixed at $14,500 plus $450,000 ballast bonus. The only bright spot appeared to be the North Atlantic, which still produced some solid rates for transatlantic business at around $15,000 for Kamsarmaxes.

Handysize

Similar to the BSI, the BHSI remained in negative territory throughout the week.

East Coast South America showed a minimal improvement, with sources suggesting more interest on the smaller Handysize ships. There also appeared to be less interest on the bigger-sizes from the Continent during mid-week, with the market remaining flat.

In the East, talk of China customs suspending imported coal prompted uncertainty, especially in the Pacific market, prompting rates to fall further.

A 33,000dwt open Poti, was reportedly fixed for a trip to the East Mediterranean at $14,500.

A 37,000dwt was booked from Constanza for a trip to the UK Continent at $12,500.

A 35,000 tonner, open North Coast South America, went for inter-US Gulf business at $15,000. The 28,000dwt sizes were talking around mid $7,000s from Japan or Singapore for a round voyage, but brokers suggested there were disparities between charterers and owners on rates, with little cargo being circulated.


FREIGHTOS BALTIC CONTAINER REPORT

Continuing high transpacific ocean prices reflects increased demand. Less Container Load (LCL) and Full Container Load (FCL) bookings on Freightos went up 40% and 42%, respectively last month, a marked contrast to last year when they didn't increase at all.

Transpacific pricing continued an extended run of 18-month highs. China-West Coast prices were above the $2,000 mark for the 14th 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 15th straight week.

High transpacific prices are a result of normal peak season activity as well as shippers front-loading to beat 1 January trade tariff increases. Prices are likely to stay high into mid-December, or even possibly until Chinese New Year, if, as Bloomberg recently reported, President Trump follows through with a threat to subject the remaining $257 billion worth of Chinese imports to a tariff.

China/North Asia to North America West Coast prices rose soon after the first tariff was announced in June and have stayed high since. This is in stark contrast to last year, when, without an unexpected spurring of demand, overcapacity saw prices actually falling most weeks from late August onward.

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.