A weekly round-up of tanker and dry bulk market (Oct 18, 2024)

This report is produced by the Baltic Exchange.

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Capesize

This week began with optimism, particularly in the Pacific, which saw early strength, buoyed by improved demand from miners and fresh coal cargoes. However, the momentum quickly reversed as the week progressed, and by midweek, market sentiment was bleak. The C5 route rates dropped from US$10.25 to end the week at US$8.965. The South Brazil and West Africa to China routes similarly softened, with a widening gap between bids and offers and C3 rates correcting downward from the low US$25s to US$22.1 by weeks end. The North Atlantic felt mixed throughout with some transatlantic activity, but overall softening with fronthaul rates dropping substantially from US$48,206 to US$41,094. Overall, the BCI 5TC had lost US$4,997 over the week, closing at US$18,875, reflecting the accelerating market decline.

Panamax

A lethargic week for the Panamax market saw a brief rally in trans-Atlantic activity towards the end, but otherwise, there was minimal action on fronthaul trips from both the South and North, leading to a slow drift in rates. An 82,000-dwt delivery Continent secured US$18,000 for a trip via the US East Coast redelivery India with coal, but activity was otherwise muted. The Pacific market also remained sluggish, with disappointing demand out of NoPac and Australia failing to support rates. Over the course of the week, numbers for longer runs drifted lower, as seen when an 82,000-dwt delivery China fixed at US$11,400 for an EC Australian round trip on Friday, down from US$14,000 for the same run and vessel type on Tuesday. This illustrates the gradual decline in rates. With limited support from the FFA market, period activity was unsurprisingly restricted, though there were reports of a 76,000-dwt delivery China fixing at US$14,200 for one-year employment.

Ultramax/Supramax

Two sides of a coin this week for the sector as the Atlantic generally saw upward momentum whilst the Asian arena lost ground. The high point from the Atlantic remained the US Gulf which saw stronger numbers being achieved predominately for trans-Atlantic runs, although fronthaul gained a little. An Ultramax was heard fixed for a trip to the East Mediterranean in the mid US$26,000s and for fronthaul runs a 63,000-dwt fixed around US$24,000. The South Atlantic remained finely balanced, although there seemed to be a bit of demand from North Coast South America, a 63,000 fixing a trip from North Brazil to the Mediterranean at US$21,000. By contrast, the Pacific lacked fresh impetus and tonnage availability grow. A 56,000-dwt fixing delivery Vietnam for a round voyage via Indonesia at US$14,000. Also, a 63,000-dwt open Indonesia fixed a trip via Australia redelivery Arabian Gulf at US$18,000. Demand remained from the Indian, with Ultramax sizes seeing US$20,000 plus US$200,000 ballast bonus for trip from South Africa to India.

Handysize

Generally, the market has seen a mixed performance this week. In the Continent and Mediterranean, limited information emerged and rates remained generally stable around recent levels. A 37,000-dwt open in Skikda was fixed for a trip to North France with clinker at US$12,000. In contrast, the South Atlantic and US. Gulf markets showed strong fundamentals and positive sentiment driven by robust demand for October dates and tight tonnage availability. A 37,000-dwt open in Praia Mole secured a trip to the Caribbean, intention Rio Haina at US$16,000. Additionally, a 36,000-dwt was fixed for a trip from SWP to NCSA at US$13,500. In Asia, the market showed signs of softening, however sentiment remains optimistic supported by healthy cargo volumes and a decent clearing of prompt vessels. A 37,000-dwt vessel was fixed for delivery from Hong Kong (Oct 12-15) for a trip via Vietnam to Singapore with cement at US$12,750. On the period side, a 32,000-dwt vessel open in Chittagong was fixed for four to six months at US$12,850.

Clean

LR2

LR’s in the MEG began showing signs of recovery after some time paused at WS115. TC1 ticked up 10.28 points at the end of the week to WS125.28 and for a trip west on TC20 the index climbed US$56,646 to US$4.16 million.

West of Suez, Mediterranean/East LR2’s on TC15 held stable and was assessed around the US$2.8 million mark all week.

LR1

In the MEG, LR1’s to the East also saw a little improvement in freight levels this week. The TC5 index 55kt CPP AG/Japan was marked 11.25 points up on this time last week to WS136.88. On the other side of the coin, a voyage west on TC8 lost a little value to currently sit at US$3.52 million (-US$85,000).

On the UK-Continent, the TC16 market didn’t dipped a meagre 0.83 points to WS108.61.

MR

MEG MR’s dropped off a little after peaking at WS241.43 early in the week. The TC17 index as a result was assessed five points weaker than last week and currently sits at WS236.41.

UK-Continent MR’s were steady this week. TC2 hovered around the high WS80’s — low WS90’s, ultimately the index dipped by 3%. TC19 followed suit, reaching WS120.63 in the earlier part of the week to tick back up to WS125.63 by the end.

USG MR’s came back under heavy downward pressure this week. TC14 was cut back down to the tune of 66.43 points to WS130.71. TC18 suffered the same fate shedding 66.43 points to WS182.86. For a trip down to the Caribbean on TC21, a 42% cut on freight levels saw the index dip 42.4% to US$514,286.

The MR Atlantic Triangulation Basket TCE came off by US$11,728 to US$17,218.

Handymax

In the Mediterranean, Handymax’s continued their current upturn as the TC6 index climbed 31.95 points to WS158.89.

Up on the UK-Continent, the TC23 held flat this week in the mid WS130’s.

VLCC

The VLCC market ceased the recent decline. The 270,000 mt Middle East Gulf to China trip marginally improved by 1 point to WS56.60 which gives a daily round-trip TCE of US$34,839 basis the Baltic Exchange’s vessel description.

In the Atlantic market, the rate for 260,000 mt West Africa/China ended the week 1.5 points up at WS61.11 (corresponding to a round voyage TCE of US$39,968 per day), and the rate for 270,000 mt US Gulf/China dipped US$97,500 week-on-week to US$8,300,000 (a daily round trip TCE of US$40,988), although at time of writing US$8,100,000 is reported to be on subjects.

Suezmax

Suezmax owners managed to recover recent market rate losses. In West Africa, the 130,000 mt Nigeria/UK Continent voyage (TD20) rose three points to WS99.64 (a daily round-trip TCE of US$38,250). The TD27 route (Guyana to UK Continent basis 130,000 mt), fared a little better to be on a par with TD20, rising eight points to WS100, which translates into a daily round trip TCE of US$38,300 basis discharge in Rotterdam. In the Mediterranean and Black Sea region, the rate for 135,000 mt CPC/Med had a much better week, climbing 14 points to WS114.70 (showing a daily TCE of US$44,964 round-trip). In the Middle East, the rate for 140,000 mt Middle East Gulf to the Mediterranean (via the Suez Canal) gained a further 1.5 points to WS105.06.

Aframax

In the North Sea, the rate for the 80,000 mt Cross-UK Continent held steady at WS122.92 (translating to a daily round-trip TCE of just over US$26,500 basis Hound Point to Wilhelmshaven).

In the Mediterranean market, the rate for 80,000 mt Cross-Mediterranean dipped slightly by one point to WS176.94 (basis Ceyhan to Lavera, that shows a daily round trip TCE of about US$53,400).

Across the Atlantic, the market fell again. Rates for the 70,000 mt East Coast Mexico/US Gulf (TD26) route and the 70,000 mt Covenas/US Gulf (TD9) route fell 10-11 points each, showing a daily round-trip TCE of US$37,705 and US$42,536, respectively. The rate for the trans-Atlantic route of 70,000 mt US Gulf/UK Continent (TD25) recovered three points to WS174.44 (a round trip TCE basis Houston/Rotterdam of US$41,555 per day).

LNG

A particularly bearish week for the LNG spot market has seen rates drop significantly for both ships and all three routes. Brokers are reporting few inquiries, a long length of tonnage, high inventories meaning product has no home, and a closed ARB, all contributing to the steep declines this week. For the East BLNG1 Aus-Japan, the two-stroke 174cbm index fell by US$9,000 to US$45,500, while the TFDE 160cbm lost US$8,900 and closed at US$31,000. BLNG2 Houston-Cont, traditionally the most liquid of the three routes, experienced the biggest drop this week, pushing sentiment even lower. The 174cbm two-strokes saw a fall of US$17,000, with rates dropping to US$27,500, while the TFDE dropped by US$14,100 to US$18,900, marking the lowest winter market levels ever reported on these routes. BLNG3 Houston-Japan didn’t fare any better, with both the 174cbm and 160cbm indexes losing US$17,202 and US$10,300 respectively, closing at US$45,198 and US$34,700.

There isn’t much hope for a quick recovery in rates, and the sentiment is soft while brokers and owners especially analyse what can be done to push levels higher. Unfortunately, the period market also had a tough week, seeing a drop in rates. Both the six-month and longer periods showed declines, with six-month rates down US$7,550 to US$66,200, and one-year and three-year periods at US$62,625 and US$76,350, respectively.

LPG

There has been another reversal in the LPG market this week. With a flat week preceding, there was hope that the sentiment would hold, and rates would remain steady. However, with only one reported fixture in the East and little more reported out West, the sentiment has fallen away, and rates have reacted accordingly.

BLPG1 Ras Tanura-Chiba dropped by US$9.166 to close below US$60 at US$58.417, giving a TCE earning equivalent of US$38,776 — a drop of US$9,352 from the previous week’s close. For the Western market, there wasn’t much to report either, with just one reported fixture and a tonnage list expected to lengthen during the next fixing window. Rates dropped, but not as significantly as in the East. For BLPG3 Houston-Chiba, a fall of US$5.333 gave the index a close of US$114.167 and a daily TCE earning equivalent of US$46,522. While BLPG2 Houston-Flushing was completely dead, the fall of only US$2.5 meant it closed at US$61.5 but with less furore compared to the other routes. A daily TCE earning of US$61,778 for Houston-Flushing was down US$3,176 from the previous week’s publication.

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