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Baltic Exchange Shipping Insights

A roundup of last week's tanker and dry bulk market

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DRY BULK REPORT

Capesize

Vale's ongoing absence from the Brazil spot market continued to have a negative impact on sentiment, with rates falling in all areas. There were operators still shipping from Brazil, with the rate from Tubarao to China hovering around the mid $12.00s for end March.

Rates for Brazil/Continent runs also slumped, with a 180,000-tonne, 10% cargo, fixed from Itaguai to Rotterdam at $4.50 for 26-29 March.

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Further north, tonnage remained relatively limited, but the bearish tone remained pervasive, with an eco 179,000-tonner coming from Cape Passero and fixing from Gibraltar for a Colombia/Turkey run at something over $6,500, plus a $70,000 bonus.

In Asia, the West Australia/China rate held over $5.00 for most of the week, but fell to $4.80 for 9-11 March, and slightly more for later dates.

However, a 169,000-tonne 2010-built vessel was booked retroactive 19 February for an East Coast Australia round at $5,000.

There were still period takers, with operators still there and a 179,000-tonner booked for around a year at 107% of the Baltic Capesize Index (BCI) 5-timecharter.

Panamax

Last week saw pockets of improvement and sentiment is now optimistic. The Pacific was mainly driven by North Pacific and Indonesian demand.

A very well described JMU Kamsarmax was fixed at $10,500 daily for a North Pacific round voyage, with most other trades now being bid up on last done.

South African coal demand continued its recent upturn in volume, which has helped the South American market.

A 2009-built Panamax vessel covered on subjects at $13,350 plus $350,000 ballast bonus at the end of the week was up from around $12,000 plus $200,000 ballast bonus the previous week.

The North Atlantic continued to struggle, with a lengthy tonnage list for transatlantic business, but fronthaul rates also increased via North Coast South America. With improved sentiment and increasing paper values, period fixing was again prevalent, with one-year fixtures again emerging at between $11,000 and $11,500 on Kamsarmaxes.

Supramax

It was a more active week on the period front, with a 60,000-dwt vessel, fixed delivery Indonesia, for a short period in the $13,000s.

From the Atlantic, a 55,000-dwt ship fixed delivery Fortaleza for 7-10 months, trading with redelivery Atlantic and Singapore-Japan at $12,000.

Improved numbers were discussed from East Coast South America and a 63,000-dwt vessel fixed for an upriver trip to the Mediterranean at around $12,250.

However, the US Gulf lost ground and a 61,000-tonner went delivery Houston to Spain at $11,000. There were steady rates from the Continent, as a 53,000-dwt ship fixed a scrap cargo to the East Mediterranean in the $9,000s.

Increased activity from the Asian market pushed levels up. A 58,000-dwt vessel open Singapore fixed a trip via Indonesia, redelivery China, at $12,500.

For India direction, a 60,500-tonner was booked delivery Singapore, via Indonesia, redelivery West Coast India, at $11,250. There was limited activity from the Indian Ocean, although a 61,400-dwt ship fixed delivery to the Arabian Gulf, end February, for a trip redelivery India at $8,250.

Handysize

Overall the index remained in positive territory this week, with improved activity from both basins.

Coincidentally, most of the fixture information gathered this week was at the level of $8,000, regardless of the route, in both the Atlantic and Pacific.

From East Coast South America, a 35,000-dwt vessel was fixed for moving coils to Marmara at $9,250. A 38,000 tonner was fixed from the Caribbean, with redelivery on the Continent, at a rate in the $8,000s.

A scrap cargo was said to have been concluded at a similar level on a Handysize vessel from the Continent to the East Mediterranean.

Another 38,000-dwt ship with Jamaica delivery was reportedly fixed at $8,500 for a trip to Norway.

In the East, more activity was reported, with positive sentiment driving up the mood. Brokers suggested better numbers were discussed, but few fixtures came to light including period deals.

From the Persian Gulf, a 35,000-dwt vessel open Port Khalifa was booked for a trip with sulphur to East Coast India at $8,500.


TANKER MARKET REPORT

VLCC

Renewed activity from the US Gulf has been driving the market. A run to Korea went at $7 million, with firmer sentiment seen in all areas.

A 270,000mt vessel from the Middle East Gulf went to Korea at WS 67.5, conservatively representing a gain of 10 points plus for China discharge.

Going west, rates for 280,000mt to the US Gulf are now seen around 3.5 points higher at WS 32.5 Cape/Cape. In West Africa, at the start of the week fixtures were concluded at WS 60 and WS 61, but with rates now assessed in the mid WS 60s.

Suezmax

West Africa rates for 130,000mt to UK Continent have been hovering between WS 65 and WS 67.5 in the region, with Black Sea/ Mediterranean rates for 135,000mt under downward pressure after initially holding in the low to mid WS 80s.

Aframax

In the Mediterranean it was a more encouraging week for owners, with the market for 80,000mt from Ceyhan gaining around 20 points to WS 107.5/108 region.

This being aided by the significant uptick in rates in the Black Sea, with the equivalent of WS 132.5 fixed here, up 30 points from a week ago.

In the Baltic, limited enquiry for 100,000mt to UK Continent saw rates ease 10 points to WS 95, with the 80,000mt cross-North Sea market following suit and losing 12.5 points to WS 102.5.

The 70,000mt Caribbean up coast market came under relentless downward pressure, with the market now at WS 115, having started the week in the low/mid WS 140s.

Clean

Rates for 75,000mt from the Middle East Gulf to Japan dropped 7.5 points to WS 102.5, with the 55,000mt market steady at WS 110.

The market for 37,000mt Continent/USAC lost almost 10 points to around WS 120, while the 38,000mt trade from the US Gulf to UK Continent eased 17.5 points to WS 102.5 level.


FREIGHTOS BALTIC CONTAINER REPORT

Summary from VP, FBX, Philip Blumenthal:

"The seasonal transpacific price tumble has begun, with China-West Coast prices dropping 13% from last week. Last year they dropped by 25% in the three weeks following Chinese New Year, and by 17% over the same period in 2017.

With transpacific prices starting to fall, did President Trump just come to the rescue by, rather surprisingly, delaying the 1 March tariff increases? That announcement may stimulate some more shipment front-loading, but large stockpiles have their downsides too.

Despite some big splashes, like the Tesla Model 3 release in China and Huawei's 5G-ready handset to be launched at Barcelona's Mobile World Congress, demand is down and freight prices will continue to drop.

Exacerbating the normal seasonal decline will be the general health of world trade. The latest WTO international trade indicator is at its weakest since early 2010."

Analysis

The seasonal price fall on transpacific lanes has begun. China-West Coast prices were $2,009 last week but dropped 13%, crossing the $2,000 magic mark in the process.

Stepping back, they've actually dropped 17% from their pre-CNY high ($2,110 on 20 January).

For China-East Coast, last week's price drop was more modest. They dropped 4% drop from $3,110, crossing this lane's magic mark of $2,000.

Prices have now dropped 10% from their pre-CNY high ($3,312 on 27 January).

Last year, prices dropped 22% in the three weeks following last year's holiday and in 2017 they only dropped 12% (but then kept dropping most weeks for the rest of the year).


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.