THE Baltic Dry Index fell off a cliff this past week, falling to 763 on Friday (20 January). This was a decrease of 19% on the previous Friday (when it was 946) and a decrease of 56% on a recent peak just a month ago on 21 December (when the BDI hit 1723).
Capesize
The average of the Capesize timecharter routes climbed when the week first began, but soon dropped from over US$10,000 threshold to US$6,529 on Friday. The steep decline mainly came from the north Atlantic region. The transatlantic and fronthaul trips were settled at US$9,083 and US$23,031, losing over US$5,000 and US$7,000 respectively over the week.
In the Pacific, the rate did not fluctuate much for the west Australia to Qingdao trade by maintaining above US$7 but was lower in the run up to Lunar New Year, however Pacific coal round voyages were offering some support to Owners.
On the period front a 206,000-dwt 2012-built delivery in Tianjin this week was fixed till mid-year 2024 at US$17,700. Another 208,000-dwt 2020-built delivery Kaohsiung on 13 January was fixed for 9 to 11 months at US$21,500.
Panamax
Overall, it returned a further week of in the doldrums for the Panamax market, as thin cargo volumes versus a long tonnage count continued to negatively impact the market.
A distinct lack of mineral requirements in the North Atlantic undermined the market here, and where there was demand it paid very low levels, suppressed all week by an increasing tonnage count of ballasters and early ships especially in the North Continent.
Front haul trips from the Americas fared a little better, highlighted perhaps by reports of an 82,000dwt delivery Gibraltar fixed at US$19,000 for a trip via NC South America redelivery Far East. Asia, unsurprisingly, proved to be fairly subdued as the market prepared for Lunar New Year holidays.
Already weak and imbalanced in recent weeks, despite relatively decent activity rates here failed to find any support route, with P3A averaging out at around the US$7,000 mark throughout the week.
Ultramax/Supramax
Another subdued week overall for the sector, with sentiment remaining negative in the Atlantic; the South American grain season has yet to start and limited fresh enquiry.
A similar situation from North America combined with an abundance of prompt tonnage kept rates in check.
A more positive feel from the Asia saw rates increase, although still at relatively low levels. The main driver for the area is the Indonesian coal runs but further north there remained a lack of fresh enquiry both for the NoPac and backhaul runs.
Period enquiry weakened, with a 55,000-dwt open China failing at US$11,500 for 4-6 months trading. From South America, a 56,000-dwt fixed delivery North Brazil trip to Algeria at US$9,000.
Elsewhere, a 60,000-dwt fixed from the Baltic to South Africa in the upper US$10,000s. From Asia, a 50,000-dwt open Cambodia fixed a trip via Indonesia to China at US$6,500. All eyes are now focused on the Year of the Rabbit to see any change in direction.
Handysize
A week of further retraction for the BHSI, with limited enquiry and upcoming holidays both factors. However, there were some quiet whispers that positivity may be around the corner in a few regions but as yet we have not seen any gains.
East Coast South America saw a 38,000 dwt fixing delivery Santos basis end of January dates for a trip to the Continent-Mediterranean range at US$10,000 whilst a 33,000 dwt fixed from Vila Do Conde via Itaqui to Algeria at US$9,250. A 34,000 dwt was fixed from the Western Mediterranean to Brazil with an intended cargo of fertilizer at US$5,250. A 37,000 dwt fixed-basis delivery Floro for 20 to 30 January at US$11,000 for two to three laden legs with worldwide redelivery. In Asia, a 38,000 dwt was fixed from Onsan to South East Asia at US$6,000. A 36,000 dwt was fixed basis delivery Ex Yard in Zhoushan to South East Asia at US$4,500.
Clean
The CPP tanker market has for the most part continued its drop this week. As with last week there are a couple of sectors that have managed to see small improvements.
LR’s in the Middle East Gulf have continued to freefall. An LR2 to Japan, TC1, has lost just under 50 points this week to WS128.13. Similarly TC5, an LR1 for the same voyage, has dropped 62.5 points to WS148.93. For charters heading to the West, TC20 (90kt Jubail/Rotterdam) is now US$3,614,286 (-US$671,428) while 65kt on the same run (TC8) is now US$2,879,500, also down around US$600,000. At these levels LR TCE’s are returning around US$20,000-25,000/day round trip.
MR’s in the region continued upwards this week, reflected in the TC17 index rising 11.5 points to WS251.14.
LR’s West of Suez have also been tested down this week with a widely reported TC15 voyage at US$3,100,000 on subjects and soft sentiment the index is currently marked at US$3,000,000 (-US$858,000). TC16 has also dipped 58 points to WS135.14.
UK-Continent MR’s saw a flurry of activity early in the week and TC2 quickly climbed to just under WS220 and then returned down to WS205. Similarly TC19 peaked at WS235 to return down to WS218 at time of writing.
Handymaxs have made an improvement in the Mediterranean and we have seen TC6 climb 11.87 points to WS191.25 from increased requirement. TC23 (30kt Cross UK-Continent) after dropping about 30 Worldscale points has plateaued at WS150.
In the Americas, the downward pressure has continued this week, most notably on a vessel needing a dry dock reported on subjects at WS75 for a Transatlantic run. The TC14 index has come down to WS80.83 (-10.21) with TC18 only losing an incremental five points to WS145 and a trip to the Caribbean on TC21 shedding US$10,000 to US$475,000.
VLCC
The VLCC market rose marginally this week, except for the US Gulf to China route. 270,000mt Middle East Gulf to China recovered a modest two points to WS46.73, which translates into a round voyage TCE of US$18,100 basis the Baltic Exchange’s vessel description, while 280,000mt Middle East Gulf to US Gulf (via the cape/cape routing) is assessed half a point firmer than last Friday at WS35.
In the Atlantic markets, the rate for 260,000mt West Africa/China stepped up 2.5-3 points to WS50.88 (a round trip TCE of about US$24,100 per day) and the rate for 270,000mt US Gulf/China fell by a little over US$211,100 to just below US$8.17 million (US$28,500 per day round trip TCE).
Suezmax
The Suezmax market was a mixed-bag rate wise this week. The rate for 135,000mt CPC/Augusta remained flat at about the WS203-204 level (a round trip TCE of US$115,100 per day).
In West Africa, sentiment is lower due mainly to news that the first half of February is reported to have fewer chartering opportunities compared to recent weeks. For the 130,000mt Nigeria/Rotterdam voyage, rates dropped 10 points to WS125 (a daily round trip TCE of US$48,600). In the Middle East, the rate for 140,000mt Basra/Lavera slipped one point to WS71.25.
Aframax
In the North Sea market, rates for the 80,000mt Hound Point/Wilhelmshaven route rose a meagre one point to a WS162 (a round-trip daily TCE of US$57,400). In the Mediterranean, the rate for 80,000mt Ceyhan/Lavera rose five points to WS244 (a daily round trip TCE of US$92,300), with cargoes from Libya and the Black Sea able to tap into the Suezmax market, thereby capping the rates for the Aframax market.
Across the Atlantic, the recent rise in rates seen for the Stateside Aframax market has slowed, with the rate for 70,000mt East Coast Mexico/US Gulf climbing through the WS200 barrier and settling on week-on-week improvement of about three points at WS203 (about US$56,800 per day round-trip TCE). The 70,000mt Covenas/US Gulf market also benefitted from a 2.5-point improvement to WS185 (a daily round-trip TCE of US$45,700). For the trans-Atlantic route of 70,000mt US Gulf/Rotterdam, rates climbed another five points to WS176 (showing a round trip TCE of US$42,100 per day).
LNG
Another tough week for LNG spot rates. The tonnage for both East and West is lengthening and though there was a report of product flowing back into Freeport, there has not been a positive affect for freight rates, which have kept falling. All three routes now sit firmly below six-digits, suffering from further falls of close to US$30,000 over the week. BLNG1g our Aus-Japan was published at US$79,517, although there are some who felt it could have been worse.
BLNG2g and BLNG3g suffered similar hardships. Market participants have said that liquidity for these routes has been especially hard to get with perhaps only one or two ships with the length to offer in at all for BLNG3g. Rates are falling hard again and, though volatility in LNG is expected when storage remains high, a cold season that seems unseasonably warm is creating further uncertainty in the volatility. We close out the week with BLNG2g and BLNG3g publishing at US$59,075 and US$73,742, respectively.
LPG
Bearish is the sentiment this week. The market has dropped on all three routes, tonnage remains long for all AG cargoes and planned maintenance in Saudi and UAE has also reduced volume so the shipping market has been quite adversely affected. Rates for BLPG1 Ras Tanura-Chiba fell by US$22 this week, a total drop of US$88.643 from market highs at the end of November 2022. We last published at US$59.714 but within two days we lost nearly US$20; a further drop cannot be ruled out as fixing now moves to last half of February.
The US market has also taken a hit, falling over US$8.5 on each route; sentiment has been flailing with charterers looking happy to sit back and see. The impact of the shutdowns in the AG will also affect the US liftings, with longer tonnage and competition now looking into March dates, with a vessel already fixed for BLPG3 Houston-Chiba at US$132 off end January. The remaining vessels will languish in the interim, which has hampered any gains. We close the week at US$62.8 for BLPG Houston-Flushing and US$115.143 for Houston-Chiba.
