Baltic Exchange Shipping Insights

DRY BULK REPORT

Capesize

A positive end to a week that saw rates on the West Australia/China run slip below $6.00, as charterers faced a plentiful supply of tonnage.

Rates below $6.00 prompted resistance, and after a clear out of tonnage, rates climbed back over $6.00 finishing the week in the upper $6.00s.

Timecharter rates slipped under $10,000 daily for 180,000 tonners, but recovered ground, with a 2010 vessel fixing from CJK for an east Australia/India run at $12,000 with an option of China at $13,000.

Brazil/China activity fluctuated, the pace quickened as the week closed, but rates were laydays cancelling (laycan) sensitive.

There was talk of tonnage fixing, with a 12-13 February position on this run at $18.00.

North Atlantic trading was largely focussed on tonnage willing to breach International Navigating Limits (INL) and owners saw premiums for trading from these areas.

A voyage cargo fixed from Seven Islands to China at a rate allegedly equating to between $33,000 and $34,000.

Panamax

It was a difficult week for most owners, with rates under pressure everywhere.

The North Atlantic suffered from a growing tonnage profile, with ballasters also competing for business.

The index fell around $1,500 daily for transatlantic rounds, with a voyage from the US Gulf to Rotterdam stem fixed at $11.70 last week compared to a similar fixture the previous week at $12.75.

The fronthaul index dropped by a similar margin, although on Tuesday, rates had appeared to improve from South America.

Unfortunately, this proved to be a temporary blip, with rates jumping to $14,500 plus $450,000 ballast bonus, before returning to around $13,750 plus $375,000 ballast bonus almost overnight.

North Pacific grains continued to be active, but the market slipped by around $1,000 daily.

However, as per the previous week, minerals demand was disappointing and Indonesia saw several vessels fixed on an Arrival Pilot Station (APS) basis, with no ballast bonus.

Period interest evaporated, with a heavy decline in Forward Freight Agreement (FFA) values.

Supramax

Since the last week, the Baltic Supramax Index (BSI) has lost over 10 percent in value, with all routes losing ground, especially in the Atlantic for prompt positions, where tonnage supply outweighed demand.

There was limited discussion on period activity this week, but an Ultramax open Chittagong was rumoured to have fixed an Index-linked period.

The Atlantic, particularly from the US Gulf, saw dramatic falls, with Supramaxes seeing around $10,000 for transatlantic runs.

East Coast South America also suffered, with Ultramaxes, open Up River, fixing in the low $12,000s plus $200,000 ballast bonus for fronthauls.

The Mediterranean also lacked impetus, as a 57,000 deadweight tonne (dwt) vessel went for a run from the East Mediterranean to West Africa in the mid $8,000s.

The Asian arena also struggled, but a 61,000 tonner open North China fixed for a trip via the North Pacific, redelivery Indonesia, at $10,500.

For Indonesian coal runs, tonnage was giving APS deliveries and a 57,000dwt ship fixed at $7,000 for a trip to West Coast India.

Handysize

The Baltic Handysize Index (BHSI) continued to fall, with rates dropping in both basins.

East Coast South America remained under pressure, with the HS3 route for 38,000 tonnes coming closer to the low recorded in early June 2018.

Rates for the US Gulf also fell, as the HS4 route for 38,000 tonnes hit a new low since reporting started in March 2018.

In the East, limited cargoes circulated last week for all sizes and routes.

On the period front, a 37,000dwt vessel was booked from South Brazil for 12 to 14 months at $12,000, with redelivery in the AtlanTic.

The first leg later booked for Nueva Palmira to Kaliningrad in the mid $9,000s.

Most of the information came from East Coast South America, with a 34,000 tonner fixing coastal business at $10,000.

A trip to Amsterdam, Rotterdam and Antwerp (ARA)-Ghent range paid $7,300 from Santos on a 37,000dwt vessel.

In the Pacific, a 32,000dwt vessel was booked passing Busan for a coal trip via the Commonwealth of Independent States (CIS) to Korea at $4,800.

A 35,000 tonner was booked from Hong Kong for a trip to the Caribbean-North Coast South America, at $3,200 for the first 68 days and $9,500 thereafter.

TANKER MARKET REPORT

VLCC

A steady week in the Middle East Gulf saw rates hovering between WS 55.75 and 56.25 for 270,000mt to China. Going west, rates for 280,000mt to the US Gulf held at WS 24.75 basis Cape to Cape.

With healthy activity in the US Gulf/Caribbean area supporting other markets, rates to China held around $7.4 million.

West Africa recovered modestly, with 260,000mt to China last fixed at WS 57.5, up 3.75 points from the end of last week. Hound Point to South Korea went at $6.2 and subsequently $6.3 million.

Suezmax

West Africa eased from low WS 90s to WS 80 for 130,000mt to UK-Continent.

Despite there still being Turkish Straits delays of around 30 days north and southbound, Black Sea/Mediterranean rates for 135,000mt fell almost 25 points to WS 107.5, with South Korea at $4.05 million and Singapore paying $3.4 million.

Aframax

Rates for 80,000mt from Ceyhan lost 30 points to WS 127.5, with the Black Sea dropping over 45 points to WS 125.

In the Baltic, after a brief rally taking rates to WS 97.5/100, the market eased back to WS 90 for 100,000mt, with options cargoes paying WS 92.5.

Cross North Sea for 80,000mt was steady at close to WS 110.

Caribbean rates for 70,000mt from Venezuela to the US Gulf were unchanged at WS 150.

Clean

Rates for 75,000mt Middle East Gulf/Japan nudged up 2.5 to WS 130, with 55,000mt steady at WS 150. Rates for 37,000mt Continent/USAC eased 15 points to WS 125.

The 38,000mt backhaul trade from the US Gulf fell 20 points to WS 92.25.

FREIGHTOS BALTIC CONTAINER REPORT

Summary

The 90-day truce on the latest China trade tariff increase caused transpacific pricing to fall through December.

The price increases that came in the New Year, a combination of fuel-related surcharge increases and General Rate Increases (GRIs), have held this week.

At $2,031, China-West Coast prices are 18% up from 30 December's $1,722. China-East Coast jumped 14% (from $2,779 to $3,171) over the same period.

Philip von Mecklenburg- Blumenthal, VP of FBX, Freightos, commented: "Uncertainty around President Trump and Xi's truce has kept US importers on their toes, stocking up before the next round of trade tariff increases. Carriers are coping differently - announcing a number of blank sailings around Chinese New Year."

Analysis

The new GRIs and fuel-related surcharge increases introduced on 1 January have held, with transpacific prices rising slightly this week.

There's a current upsurge in demand as importers replenish after Christmas, and coupled with the Chinese New Year close down coming up, prices are likely to stay buoyant through January.

China-North Europe prices held firm after their 13% jump last week. With the three leading indexes all up, the global index also rose again this week.

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.