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Baltic Exchange Shipping Insights
DRY BULK REPORT
The story over the past week has been largely Atlantic dominated as the basin's uniquely volatile characteristics came into play.
Starved of tonnage for most of the year, the Atlantic basin has encountered growing demand from Brazil to China which is primarily serviced by the ballaster fleet.
Those vessels in the Atlantic already have been steadily picked off for longer north Atlantic fronthauls, exacerbating the fundamentals situation.
The addition of a small uptick in transatlantic business has ignited the market.
Meanwhile the Pacific reached heights earlier in the week on West Australia to China C5 route of $8.00, closing the week trading last at $7.40 and looks to be steady there.
With a charging Atlantic market those vessels looking to make a choice on their next business will increasingly favour the West which will likely trigger a response from the East.
The C5TC market opened Monday at $14,203 and closed Friday at $17,947.
Rates everywhere slipped throughout last week.
Initially transatlantic rates held firm due to limited available tonnage, however enquiry was also thin and the recently active North coast South American front haul market had slowed, giving north Atlantic tonnage fewer options.
The South American market was hit much harder with pressure on first half June positions seeing rates tumble to around $14,500 plus $450,000 ballast bonus for modern Kamsarmaxes.
This compares to around $15,500 plus $550,000 ballast bonus the previous week, as the dwindling cargo volume took effect.
In the East the Indonesian market was very busy to various destinations.
However, there was limited support from Australasia or NoPac, meaning a steady decline in levels fixed with brokers commenting on a wide bid/offer spread all week apart from prompt positions.
There were few period discussions, although a Panamax in North China agreed $11,250 for four to six months with a Japanese charterer.
The BSI has been climbing since last Thursday and gradually back to the level last seen in early June.
The Mediterranean market showed signs of improvement with more positive sentiment.
However some ships were ballasting from west Mediterranean to north Brazil.
Rates started to ease in east coast South America with Ultramax vessels fixing around $14,000 plus a ballast bonus of $400,000 or lower for a trip to the Far East.
The US Gulf area was quiet at the beginning of the week, but with the tonnage list tightening and fair amount of cargoes circulating with end June dates, Ultramax vessels were reportedly fixed at $15,000 for a trip from Southwest Pass to Morocco or $19,500 for a trip to China.
In the East, the market remained active with coal stems from Indonesia lending support.
A 56,000-dwt was fixed from Indonesia to Vietnam at $10,000 and a 50,000dwt ship was fixed to China at $8,000 basis Singapore delivery.
A couple of short period fixtures were also reported with an Oshima 62 type new building fixing from shipyard in Japan for seven to nine months at $11,750 with redelivery worldwide.
The highlight of the week went to the US Gulf with strong rates reported especially on the bigger-sized Handy vessels.
The Gulf route index moved sharply higher with little tonnage being able to make the charterers' cancelling date by end June, and the difference between the 38,000-dwt and the 28,000-dwt was evident and tiered.
A 37,000dwt was fixed at $13,750 from Mexico for inter-Caribbean business, and a 38,000-dwt open Houston was fixed for grain to Mexico at $12,000.
A trip from Canakkale via the Black Sea paid $6,500 on a 33,000-dwt to Israel and $5,250 on a 37,000dwt to Italy.
In the Pacific, there was little reported with no sign of recovery.
A 29,000dwt open Thailand was fixed for moving sugar to Japan at $6,000.
TANKER MARKET REPORT
Since last week's attacks in the Gulf of Oman political tensions remained high, leading owners and charterers trying to determine practical ways to continue fixing in the Middle East Gulf.
After a slow start, deals started emerging. Rates shifted dramatically upwards, with 270,000mt MEG/China now at W51.5/52 level up about W12 points, with 280,000mt to US Gulf basis Cape/Cape assessed W4 points higher at W22-23 region.
West Africa/China increased around W10 points to W50/51 for 260,000mt, while 270,000mt USG/China is now rated at $5.8-5.9m, up $800-900k for the week.
West Africa suezmax rates for 130,000mt to UKC came under heavy pressure this week, losing W10 points to W70, while 135,000mt Black Sea/Med dropped W5 points to settle at W90.
Owing to the Middle East tensions, 140,000mt Basrah/Med voyage rates shot up during the week to W55-57.5 region, before easing to W47.5 which still represents a rise of 12.5 points week-on-week.
80,000mt Ceyhan/Med is now around W85, down W5 while 80,000mt Cross-North Sea eased W5 points to W87.5, and 100,000mt Baltic/UKC at low/mid W60s.
Again, due to tension in the Middle East, rates there pushed up and 80,000mt AG/Singapore is now assessed at W120/122.5 level, up 12.5-15 points for the week.
Middle East Gulf clean tonnage failed to apply the pressure felt on crude with rates climbing marginally over the week; 75,000mt MEG/Japan sits at W102.5/105 level, up W2.5 points, and 55,000mt AG/Japan was flat at W112.5/115 level.
The best performing markets this week were in the Atlantic, with 37,000mt Cont/USAC recovering to W115-117.5 level, up about W15 points, whilst 38,000mt USG/UKC fixed at W100, up W20 points.
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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.
- The report is also available online at bt.sg/baltic.