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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

Another positive week for the Middle East Gulf as rates firmed six points to WS 96 for 270,000mt to China.

Going west, 280,000mt to US Gulf was assessed 2.5 points higher, around WS 42.5 if Cape/Cape.

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West Africa to China basis 260,000mt climbed 10.5 to WS 100, while Indonesia discharge fixed at both WS 100 and WS 105.

Suezmax

Increased tonnage availability prompted a 17.5-point drop to WS 127.5 for 130,000mt to UKContinent.

Black Sea/Mediterranean rates weakened 10 points to low-mid WS 160s for 135,000mt, with South Korea fixed $300,000 lower at $4.6 million.

Aframax

Rates for 80,000mt in the Mediterranean firmed 15/17.5 points to the low WS 180s, while lengthy Turkish straits delays saw Black Sea rates gain 20 points to peak at WS 192.5.

Tighter tonnage availability in the Baltic saw rates for 100,000mt gain 12.5 points to WS 102.5, with the 80,000mt cross-North Sea trade similarly up at WS 127.5/130.

In the Caribbean, rates continued to fall, now at WS 135, down 35 points for 70,000mt from Venezuela to US Gulf.

Clean

An encouraging week for owners saw rates in the 75,000mt Middle East Gulf/Japan market climb 35 points to WS 155, with 55,000mt fixed at WS 140, but with owners now asking closer to WS 170 with the pressure still on.

Another busy week, and a thinning tonnage list saw runs from the Continent/Baltic to USAC firm, with the last fixed 40 points higher at WS 182.5 for 37,000mt.

The 38,000mt backhaul trade from US Gulf enjoyed another positive week, gaining 17.5 points to low WS 170s.


DRY BULK REPORT

Capesize

A roller-coaster week for the big ships with hopes soaring at the start for a mini last quarter revival, only to be dashed as the week closed out.

The West Australia/China rates nudging $9.00 by Tuesday having closed out the previous week at near $6.00 and finishing in the mid $7.00 with rumours of a lower price agreed.

The Tubarao/China rate whiplashed from $15.00 to $18.00 to $15.00 in a week - and some expecting it to go lower. Vale made a last-minute appearance in the market, fixing at $15.00 for a 15-24 December and reportedly still in the market.

Timecharter rates in Asia peaked in the low $20,000s and closed nearer the mid-teens. Added to the gloom came news of a damaged bridge affecting the rail route into Saldanha, with latest reports saying it would not be open until 9 December.

The North Atlantic market has seen firmer sentiment, but volume remained thin and rates here drifted lower with timecharter rates fronthaul slipping to nearer the low $20,000s, and Puerto Bolivar/Rotterdam now nearer $7.50.

Period reports included an eco-Newcastlemax fixing for about a year in the low $20,000s, with 9-10 December delivery Bayuquan.

Panamax

Last week ended slowly in the Pacific with sources suggesting the Chinese were awaiting a positive outcome to the US-China trade war at the weekend.

Rates definitely stabilised during the week, with various reports of higher fixtures concluded, although many questioned the validity of the stronger rumours as some suggested the rates had been timecharter equivalents of voyage fixtures.

Generally, there was plentiful enquiry, but many charterers had been holding back. The Atlantic also proved difficult to read: South American rates remained fairly flat, although the list of ballasters was a cause for concern, whilst the north Continent continued to appear the tightest area for tonnage supply, but without fresh enquiry this too may come under pressure soon.

Supramax

As the week closed Asia saw improvement, which led to the BSI moving into positive mode. Period talk included a 56,000dwt, fixed delivery Singapore, three to five months trading in the mid $10,000s.

There were increased trading from the US Gulf and Ultramax, fixed in the mid $20,000s, for a petcoke run to the Mediterranean. Trading slowed from the Mediterranean and rates eased slightly.

Asia activity increased as the week ended with a 55,000dwt, fixed delivery Makassar via Australia, redelivery Singapore-Japan at $10,750.

And Indonesia coal business a Supramax, fixed delivery Kalimantan to West Coast India, at $11,000. From the Indian Ocean, levels remained static and a 55,000dwt, agreed $13,500 from Pipavav via Mina Saqr to Bangladesh.

And further south a 56,000dwt, fixed delivery South Africa, for a trip to Arabian Gulf/West Coast India at approximately $12,000 plus $200,000 ballast bonus.

Handysize

There were no significant changes in the Handy market with limited activity reported. The BHSI recorded a further drop on Wednesday to 629, the same number the index achieved two months ago.

The market remained slow overall but some brokers saw the rates for handy vessels from the US Gulf picking up, especially for the bigger sizes. Early last week, a 35,000dwt, open north Brazil, was fixed at $14,900 for moving sugar to the western Mediterranean.

A 28,000dwt was booked to ARAG range at $11,500, basis Jamaica delivery. A 31,000dwt agreed $10,000, basis Guayaquil, for a trip via North Coast South America to redeliver in West Africa towards the weekend.

From the US Gulf, a 32,000dwt was booked from the Mississippi River, delivery to the Caribbean, with grain at $14,000.

In the East, a 28,000dwt open Port Kelang was fixed with an early December date for a run via Malaysia and redelivery southeast Asia at $8,000. A 43,000dwt open, redelivery South Korea, was booked for a trip to CJK with clinker at $7,000.


FREIGHTOS BALTIC CONTAINER REPORT

Remarkably, on both lanes this week, transpacific ocean pricing is more than double what it was this time last year. China-West Coast has increased by 130% and China-East Coast by 126%. That's because, whereas, last November prices were falling as peak season wound down (respectively dropping 30% and 29% in the four full weeks of November), this year prices have largely held. China-West Coast prices are down just 4% from three weeks ago, China-East Coast prices are 8% up.

Peak season is over for the China-Europe lane. Over the past eight weeks, prices have come in within a narrow $128 band between $1,441 and $1,669. However, when 2M's AE2/Swan Asia-North Europe loop resumes next month, prices will drop well below that band.

The mid-month GRI was anything but impressive. Still, transpacific prices have generally held through November, with China-West Coast prices just 4% down on three weeks ago and China-East Coast prices 8% up. In a different light, those same prices look a lot more impressive.

It's the 16th week in a row that China-West Coast prices have breached the $2,000 mark and 17th straight week for China-East Coast prices above the $3,000 mark. More impressive still is that transpacific ocean pricing is more than double what it was this time last year.

Like the financial markets, carriers can only guess what happens next with trade tariffs. The G20 summit may have concluded with a ceasefire to the trade war between the world's two largest economies but there was no firm agreement. With both countries smarting from the tariffs, and neither leader wanting to back down, the guessing game may continue. In that case, freight prices will largely stick.

But any backing down or agreement will see freight prices dropping significantly. If instead, the administration increases tariff rates and/or the range of imports subject to a tariff, then prices will rise.

Continuing high transpacific ocean prices reflects increased demand. LCL and FCL bookings on Freightos went up 40% and 42%, respectively in October, a marked contrast to last year when there was no increase at all.

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.