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Baltic Exchange Shipping Insights

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

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DRY BULK REPORT

Capesize

The Capesize market managed to find a floor and rally a little this week after several weeks of declines. While the West Australia to China C5 route lifted early in the week, it once again topped out to soften by Friday.

Opening the week at $9.168, the route lifted to $9.518, before closing at $9.227 by week-end.

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Out of Brazil, C3 managed to trade up from $22.018 to $27.782, mainly off the remaining October loading dates.

C3 cargo liquidity into November is said to be less certain, with bids heard to be sparse.

The Atlantic Basin is now pricing more in parity with the Pacific, with both managing an uptick in value this week. This improved sentiment was short-lived, as Friday posted a slight relaxing of rates in both Basins.

The Capesize market opened the week at $23,675, to close on a down note on Friday at $26,382.

Bunkers continues to play an unpredictable role in trading, while frequent discussions are now being heard as to when vessels will switch to low sulphur fuel for the impending IMO deadline.

Panamax

The BPI had an all positive week and broke the barrier of 1900 points by Friday, with both basins sharply improving.

Rates from the Pacific moved up quickly, particularly for Australia-round voyages since midweek.

For Indonesia loadings, Panamax vessels open South China were reportedly fixed at $14,000 level, with redelivery back in China.

For trips from East Coast South America, more fixtures were reported later in the week, with rates based on retro sailing Singapore or India delivery.

A 76,000dwt ship was fixed for a fronthaul run from East Coast South America at a rate in the mid $16,000s, plus mid $600,000 ballast bonus, and a similar size did a similar trip at $15,000 basis Indonesia delivery and Japan redelivery.

The Atlantic market also climbed with some optimism as brokers reported tight tonnage lists, especially in the Continent.

On the period front, a Kamsarmax was fixed in the mid $13,000s basis delivery South China for eight to eleven months and mid $14,000s basis delivery Singapore.

Ultramax/ Supramax

Overall the Baltic Supramax Index (BSI) remained in positive territory. Period interest was limited, with gaps between Owners' and Charterers' ideas.

From the Atlantic, as the week closed with stronger demand in the Kamsarmax, rates were beginning to improve for the Ultramax sizes, but limited fresh information surfaced.

A 55,000dwt vessel traded at around $18,000 for a transatlantic run delivery East Coast South America.

Elsewhere there was little fresh enquiry from the US Gulf, and with a steady supply of tonnage the area was finely balanced.

Downward pressure was also seen from the East Mediterranean, again with a steady supply of tonnage.

The Asian arena fared better, with tonnage remaining tight.

A 52,000dwt ship open Villanueva fixed a trip via Indonesia to West Coast India at $14,000.

From the Indian Ocean, an Ultramax covered delivery South Africa trip to Sri Lanka at $13,250 plus $325,000 ballast bonus.

Handysize

A lacklustre week for the Handysize market, with many routes losing ground. However, as the week closed some saw more positive signs.

From East Coast South America, a 45,000dwt ship was linked to a transatlantic run in the mid $17,000s, and a 36,000-tonner was rumoured fixed at $20,000 for a trip to West Coast South America.

From the North Coast South America, a 30,000dwt ship was reported fixed for a trip to Norway in the high $14,000s.

With the holiday at the beginning of the week, the Asian arena also closed with positive signs.

A 37,000dwt ship open Jakarta fixing for two to three laden legs at $10,000.

Earlier in the week a Handysize open North Vietnam was fixed for a trip to China with clinker at $9,000. It remains to be seen if the positive moves continue in the coming week.


TANKER REPORT

VLCC

In the last few weeks we have mentioned huge market improvements.

This week's activity puts those improvements into the shade. In the Middle East Gulf, rates have shot up around 100% from a week ago.

280,000mt to the US Gulf, via Cape to Cape, is now rated at WS 90 level, while 270,000mt to China last rated at WS 175.

However, we hear rates have moved on to WS 205 and possibly higher still.

In West Africa, rates for 260,000mt to China have risen to the WS 160 level.

However, the next is likely to be in line with Middle East Gulf to China.

Meanwhile 270,000mt US Gulf to China has leapt $2m to $14.5m, yet reports are emerging of close to $16m being done for a Singapore discharge.

Suezmax

Rates for 130,000mt West Africa to UK Continent have moved up about 50 per cent to WS 240-245 level, although at the time of writing WS 275 is rumoured to have been done, while 135,000mt Black Sea to the Mediterranean voyages also saw a similar push upwards to WS 250-255 level.

Rates for 140,000mt Basra to the Mediterranean have doubled to WS 110 region.

Aframax

The market in the Mediterranean slid back about 35 points to WS 187.5-190 level.

In the North Sea, rates for 80,000mt East Coast UK to UK Continent increased by another 25 points to WS 195-197.5 region, while 100,000mt Baltic to UK-Continent showed an increase of about 12.5 points to WS 152.5-155 level.

A rollercoaster week in the 70,000mt Caribbean market as rates initially fell and then recovered, with Caribbean to US Gulf up 50 points week-on-week to WS 200 region, and US Gulf to the Med seeing the same increase to WS 195.

Clean

The firm sentiment remained to the fore, rates for 75,000mt Middle East Gulf to Japan gained almost 15 points to just below WS 150, with the LR1s following suit, up over 10 points to WS 130 region.

In the 37,000mt clean Continent to US Atlantic Coast market rates quickly firmed, peaking at WS 135, before easing back 10 points, with plenty of ballasters from USA contributing to a surplus of tonnage here and leaving this market under downward pressure.

The 38,000mt US Gulf to UK Continent backhaul trade gained 15 points to mid WS 90s.


BALTIC EXCHANGE NOTICE

Baltic Exchange Panamax Curves for 82K 5TC

The Baltic Index Council has approved the live reporting of a derived forward curve for the 82K-5TC route.

A fixed differential will be applied to derive the 82K-5TC forward curve from the 74K-4TC forward curve. The fixed differential will be the average difference between the underlying indices, 74K-4TC and the 82K-5TC.

The differential for Q4 2019 will be calculated as the average difference for the period; 1 January 2018 to 30 September 2019.

The differential for the year 2020 onwards will be the average difference for the period; 1 January 2018 to 31 December 2019.

The Q4 differential has been calculated as $1,387.

The 82k-5TC forward curve is now live and available from the website, XML feed and daily PDF reports. Any feedback or questions should be directed to balticbroker@balticexchange.com

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.