Baltic Exchange Expedition Updates: July 8

A weekly overview of the tanker and dry bulk market (July 8, 2022)

This report is produced by the Baltic Exchange.

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Capesize

Overall, the market was active in both basins, especially with more encounters reported in the North Atlantic mid-week. With limited interest in freight at the start of the week, rates remained negative. Trade between Western Australia and Qingdao failed to hold the previous week’s $11 level, but rallied to $11 on Thursday before experiencing a marginal decline again on Friday. Brazil’s ballast trade in Qingdao remained above $30, slightly lower than last Friday’s $30.40 week-on-week. In the North Atlantic, the feeling would be better as the week ends for transatlantic round trips. Despite the improved offers, no new benchmark had set further than the last one made or actually reflected a higher time charter equivalent value. At the end of the week, the transatlantic run stood at nearly $24,000 while the transpacific round trip ended at $14,205. The Capesize 5TC average gained $539 to end at $18,825 for the first full week of July.

panamax

It was another week that saw significant further losses. A similar trend has emerged in both basins, largely due to a lack of demand for minerals in the Atlantic Basin and few fresh cargoes from both Australia and NoPac in Asia. Transatlantic rates fell sharply to less than $20,000 on vessels of lower description, while reports showed delivery of 82,000 dwt in northern France reaching $31,250 for a voyage via delivery of the Gulf of the United States in the Far East. Elsewhere, limited deals were available. Asia was still short of significant cargo both outside Australia and in the northern part of the region. As a result, rates were under pressure across the board despite another week of strong demand from Indonesia. The bid/ask spread on the longer rounds remained wide all week. A delivery of 75,000 dwt to Korea accepted $17,000 for a NoPac round trip, illustrating the lack of support in the region. There was a period of limited activity, although a delivery of 81,000 dwt to China reached $23,000 for a period of 10/12 months.

Ultramax/Supramax

A rather tricky week for owners with both basins still under pressure and persistent bearish sentiment in many areas. Very little period surfaced but a fixed delivery of 60,000 dwt was heard in August/September in the Far East for two years at 113% BSI. In the Atlantic, the only positivity was seen in the Gulf region of the United States, which bucked the overall downward trend. An open US East Coast of 52,000 dwt was set in the upper $20,000 for a Mediterranean voyage. It was a position week from the South Atlantic. A 63,000 dwt secured a delivery trip to Tubarao in Bangladesh at $29,000 plus $450,000 ballast bonus. From Asia it was a similar situation with sentiment remaining negative due to limited steel demand from the north and a fair amount of fast tonnage in the south. From the north, a fixed delivery CJK of 63,000 dwt was heard for a US Gulf voyage at $26,750. From the south, an open Singapore of 52,000 dwt was heard for a voyage via Indonesia with a new delivery to China at around $19,000.

Convenient size

A week of limited activity, brokers said was mainly due to limited further investigation in both basins, putting negative pressure on rates. On the east coast of South America, a 36,000 dwt was anchored from Barcarena to Italy with an expected cargo of grain at $22,000. After a slow start in the US Gulf, a 35,000 dwt was set for a voyage from Port Arthur in Brazil with an expected cargo of soda ash at $9,500. A 36,000 dwt was secured from Rouen in Morocco with an expected cargo of grain at $15,000. A 36,000 dwt was delivered to Canakkale via the Black Sea to the US Gulf at $20,500. In Asia, a 33,000 dwt was reportedly set for a voyage from South Korea to South East Asia with an expected cargo of $20,000 slag and a 34,000 dwt was set from Surabaya to Iran for a delivery at the beginning of July in the 20,000 dollars. . All eyes are on the week ahead to see if there will be a change in direction.

To clean

Middle Eastern Gulf cargo continued to decline this week. TC1 lost 16.79 points at WS206.07 and TC5 bottomed at WS285 at the time of writing. On the MRs, TC17 pulled back some of it to drop below WS500, the index is currently pegged at WS468.33 (-WS41.67), that’s still over $40,000 pd round trip TCE .

In the West, TC15 LR2s saw a major freight correction this week with $3.75 million set twice on the same day, leading the index to currently sit at that level and bring the TCE for this race in the negative. LR1s on TC16 have been resolved, holding around WS240 all week and constantly fixing at this level.

On the UK mainland, RMs have had a balanced supply and demand this week. However, they always lean towards the softer. TC2 lost 14.44 points on WS315 ($28,500 round trip TCE) and TC19 followed the same path of 13.58 points on WS325.71.
The USG MR market resurgence has stalled this week. This was then followed by an inevitable downturn following Independence Day and reduced activity. TC14 fell to WS240 (-WS30) and TC18 also plunged WS248.33 to WS337.5 ($36,000 round trip TCE).

The MRA TCE went from 47,431 to 43,497.

On the Handymax TC6 was significantly tested this week by what little investigation there was. TC6 is down 131.56 points this week and currently sits at WS323.75 and the round trip TCE dropping from $80,000 pd to the mid $40,000.

In the Baltic, TC9 has been resolved this week, unwavering since WS510 and bunker price swings have just taken the round trip TCE above the $60,000 pd mark at the time of writing.

VLCC

VLCC rates have risen again this week and earnings look a little less negative. The 270,000 mt Middle East Gulf/China rates improved one point to a shadow above WS56.5 (a round trip TCE minus $5,400 pd). Meanwhile, the 280,000 mt trip Middle East Gulf/USG (via the Cape of Good Hope) is again rated at WS33.

In the Atlantic, rates for 260,000 mt West Africa/China were stable at the WS57-58 level (minus $3,600 pd round trip TCE). However, US government exports have seen an increase in various asset sizes resulting in a handful of installations on VLCCs and the rate of the 270,000 ton voyage between the US Gulf and China has jumped from $643,000 to just under $6.9 million (a round-trip TCE of minus $6,600). pd). Some overnight reports now have a major Chinese charterer on submarines with a $6.9 million Cosco vessel.

Suezmax

Fares for the 135,000mt Black Sea/Augusta fell 3.5 points this week to WS126 (a round trip TCE of $28,300 pd), while the 130,000mt Nigeria/UKC route saw fares fall by nearly five points to WS114 (a round-trip TCE of around $20,300 per day).

In the Middle East, rates for the 140,000 tonne Basra/Western Mediterranean slipped two points to WS55. Today’s latest report is for a ship on matters at WS57, but no further details were available at the time of writing.

Aframax

The Mediterranean market continued to face downward pressure with Libya alongside Russian uncertainty, leaving the list of positions quite long. Fares for 80,000 mt Ceyhan/Western Mediterranean fell another 2.5 points to just below the WS160 mark (a round trip TCE of around $26,000 pd). Activity in Northern Europe picked up with some baseloadings of North Sea rigs proceeding quietly and rates also increasing. 80,000 mt Hound Point/UK Continent is now worth 29 points more than a week ago at WS180 (a daily round trip TCE of $44,800). Meanwhile, the 100,000 mt Primorsk/UK Cont route showed a more modest improvement of nine points to a touch above WS197.5 (a round trip TCE of $54,300 pd). On the other side of the Atlantic, a much more exciting story unfolded with charterers entering the market as the list of positions grew shorter. Fares for the 70,000mt EC Mexico/Gulf US route continued their upward trajectory, with each match performed at a higher level than the last, rising 85 points for the week to just over WS280 (a TCE round trip $60,100 pd). The 70,000 tonne Caribbean/US Gulf trip, where sentiment is closely aligned with that of the Mexico/US Gulf CE route, saw rates catapult another 67 points to WS258 (a round-trip TCE of approximately $46,600 pd). For the 70,000 mt US Gulf/UK Continent transatlantic voyage, rates improved 26 points to nearly WS209 ($30,500 pd round-tip TCE). This seems likely to attract ballasters from other regions.

Baltic Stock Exchange News

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