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Baltic Exchange Shipping Insights
DRY BULK REPORT
The market traded in a relatively stable supported manner in the Pacific this week while the Atlantic experienced weakening turbulence.
Fixture activity was strong in both basins with trade executed generally on a voyage priced basis.
The 5TC opened the week at $26,382 before closing on a slightly down note Friday at $25,117.
The Brazil to China C3 was the big mover this past week opening at $23.782 to close down at $20.945.
The Pacific C5 market continued to trade in a limited range opening at $9.227 to end out the week on a positive at $9.114.
Discussions continue to be heard regarding vessels cleaning fuel tanks in preparation for IMO 2020.
Vessels going out on timecharter are needing to consider what fuel the vessel is being returned with, whilst ideally having a good indication of where that will be for bunkering considerations.
Some have been heard to give favorable prices for bunkers on delivery to entice trade.
While traders are well versed in bunker planning, the IMO's hard deadline is problematic for the inherent variability of shipping schedules.
The added complexity will surely turn up more issues over the coming months.
The positive trend from last week did not continue, with both basins showing signs of softening since Tuesday.
Despite east coast South America market, limited activity was reported from the rest of Atlantic with some principal accounts using their own tonnage for loading their own cargoes.
In the East, brokers saw decent amount of cargoes, but the fixing rates remained relatively flat due to ample supply of vessels.
Kamsarmax vessels were fixed in the $16,000s level plus a ballast bonus in the $600,000s for a trip via east coast South America back to the Far East whilst some similar-sizes were also reportedly done in the $17,000s with ballast bonus in the $700,000s for a similar run.
However, whether the stem was of end October dates or early/mid November, dates made a difference with the bunker price being a crucial factor as well.
In the East, there were reports of Kamsarmax vessels fixing in the mid $16,000s for a Nopac round voyage basis delivery mid China and in the range of $13,000-$15,000 for an Indonesia run basis delivery south China.
The US Gulf market weakened the most with the transatlantic route S4A falling over $750/day from the end of last week.
ADMI fixed a 63,000 dwt for grains to Continent at around the $18,000 level.
Trips to India/Asia came off a shade too: XO Shipping fixed the Spar Pyxis (63,800dwt, 2015) for US Gulf petcoke to India at $31,000.
Rates from South America seemed to hold up. Norden fixed the Ocean Andre (63,647 2017) open Aratu for a trip to the Far East at $46,500 + $650,000 and Cargill was linked to a Tess 58 open Rio Grande end October at $16,000 + $600,000 bb.
In Asia trips from the Singapore area were paying between $14,000 and $16,000, depending on the vessel size and duration.
There was a softer feel during this week on most of the routes. Tonnage open W Mediterranean/N Continent did not seem to have much choice of cargo.
Clipper fixed the Maas Confidence (34,914dwt, 2016) open Setubal prompt for a trip with steels to Tampa/Veracruz at $11,000.
The was good activity in the Black Sea/Mediterranean, for trips within the region as well as destinations like West Africa, where a 46,000 dwt managed a rate in the low $16,000's earlier in the week.
At the end of the week the smaller size vessel Friendly Island (28,387dwt, 2012) fixed delivery Constanza for a trip to Egypt or Turkish Mediterranean at $12,000.
Rates in Asia remained relatively flat and whilst the indices lost a little value, some brokers still felt they should remain steady.
Although there were stratospheric rates seen on subjects last week, charterers did not lift subjects on a large proportion, thus regaining some control and forcing owners to kowtow.
We now see 280,000mt Middle East Gulf to US Gulf basis Cape/Cape being assessed at WS85 (down 90 points), while 270,000mt to China is last reported done at WS120: nearly 200 points lower than a week ago.
In the Atlantic area, a similar scenario was seen and 260,000mt West Africa/China is last reported done at WS107.5 down 180 points, and 270,000 USG/China now $12.9m level, almost half of last Friday's assessment.
As with the biggest ships, rates here were realigned during the week. 130,000mt West Africa/UKC fell 80 points to WS200 level, while 135,000mt Black Sea/Med shrank about 30 points to WS225-230 region.
140,000mt Basrah/Med rates climbed 55 points earlier in the week but have since receded and are now assessed at WS152.5/155 level, still up 10 points week-on-week.
The Mediterranean market ebbed and flowed, with rates for 80,000mt Ceyhan/Med peaking at the WS225 region and now at WS202.5, still about 10 points higher than a week ago.
In the North Sea, rates for 80,000mt ECUK/UKC dipped and recovered to last week's level of WS 192.5/195 level, while 100,000mt Baltic/UKC rose about 10 points to W160/162.5 level.
Caribbean rates for 70,000mt have remained relatively flat, with Carib/USG at WS205/210 level and USG/Med hovering around WS195.
It has been a very positive week for owners in the 75,000mt Middle East/Japan trade with rates almost doubling to sit now at WS300 which has been repeated numerous times.
The LR1s followed suit with rates of between W265/280 being shown, but these deals appear to have failed and the market is assessed potentially closer to WS220.
This still represents a gain of almost WS75 points.
In the 37,000 Continent/USAC market, rates quickly firmed from WS125 a week ago, with WS210 put on subjects.
This was not confirmed and subsequently WS170 was agreed and then Exxon reportedly did WS160 from Port Jerome.
The 38,000mt USG/UKC backhaul trade gained 10 points to mid WS120s.
This report is produced by the Baltic Exchange.
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- The report is also available online at bt.sg/baltic.