THE BALTIC Dry Index fell slightly last week.
The BDI started the week at 1145 and crept down steadily throughout the week.
The index rounded out the week at 1129 on Friday 11 August.
The week started with the usual slow pace on Monday, but it quickly picked up momentum. In the Pacific, the underlying sentiment remained positive, with two out of the three major players actively participating from West Australia to China. Rates on C5 showed improvement, rising by approximately 15 cents at the beginning of the week. The Atlantic market, while limited in activity, showed optimism in the South Brazil to China region, particularly for end August loaders. As the week progressed, a slightly mixed tone emerged as Singapore’s National Day holiday approached. Activity levels varied, with some days showcasing increased participation while others remained quiet. After the holiday in Singapore, the market saw the re-entry of two major players in the Pacific, alongside an increase of operator cargo. However, despite increased activity, the supply of available tonnage gradually started to accumulate due to the reopening of several Chinese ports following last week’s typhoons. As a result, rates encountered difficulties and registered a decline towards the end of the week. In the Atlantic, the week’s start had been robust, especially from South Brazil to China. However, as the week proceeded and dates shifted slightly forward, activity levels in this region diminished. Despite this decline, market conditions have demonstrated resilience as the week draws to a close.
A stronger week overall as tonnage availability remained tight in the North Atlantic, which led to further strengthening for both trans-Atlantic and front haul runs. An 84,000-dwt fixed from Jorf Lasfar via Ponta Da Maderia to the Western Mediterranean at US$15,500. The South Atlantic showed appetite for both August and September tonnage, which also drew tonnage from further afield, while an 81,000-dwt fixing retro sailing Krishnapatnam trip via EC South America redelivery Singapore-Japan at US$13,800. Whilst an 80,000-dwt was fixed basis delivery end August for a trip from EC South America to Singapore-Japan at US$16,250 plus a ballast bonus of US$625,000. In Asia despite local holidays the market remained firm, an 84,000-dwt fixing delivery Japan for a NoPac round in the mid US$11,000s. Better levels of enquiry from the south saw an 81,000-dwt open Koh Si Chang mid-August fix a trip via Australia redelivery China at US$10,000. Period activity was again in demand an 80,000-dwt open Haldia fixed for one year at US$13,500 with worldwide redelivery to a grain house.
A rather more positive week than of late, with better levels being discussed, brokers said. The Atlantic saw positional opportunities from the US Gulf whilst from the South Atlantic more enquiry was seen certainly for the larger ultramax. From Asia, a slightly mixed bag with more activity was seen at the beginning of the week prior to the Singapore holiday, a tightening of prompt tonnage availability ensued helping to maintain a more positive feel despite relatively low activity from the North. Period activity was seen, with a 64,000-dwt fixing delivery Mediterranean for minimum nine months to maximum 12 months trading redelivery worldwide at 115 % of BSI. In the Atlantic A 63,000-dwt was heard fixed for a trip delivery SW Pass redelivery Atlantic Colombia at US$9,000. Further south a 63,000-dwt fixed in the upper US$13,000s plus upper US$300,000s ballast bonus for an EC South American fronthaul. From Asia, a 63,000-dwt open China fixed a NoPac round at US$8,750. Elsewhere, a 63,000-dwt fixed a trip from East Africa to Southeast Asia in the mid US$10,000s.
More activities were seen as the week progressed leading to gains across both basins. In the East Mediterranean, a 37,000-dwt fixed basis passing Çanakkale via the Black Sea to the West Mediterranean at US$7,400 with an intended cargo of grains. A 34,000-dwt fixed from the French Bay to Abidjan with grains at US$7,200. In the South Atlantic a 37,000-dwt was rumoured to have been fixed from Paranagua to Cadiz with a cargo of sugar at US$9,500. In Southeast Asia, tonnage availability was said to have tightened and a 34,000-dwt logger type opening in Thailand was fixed for two laden legs at US$10,500 whilst a 38,000-dwt was fixed from Port Kelang to China at US$7,250 earlier in the week. Period was also active with a 28,000-dwt opening in Kuchin was rumoured to have fixed for three to five months at US$7,000 for the first 45 days and US$8,250 thereafter.
LR2’s in the MEG have suffered from dwindling activity this week and coupled with a short week in Singapore freight levels have come off. TC1 is currently sitting at WS122.22 (-28.06) with WS120 widely reported on subjects. For a run to the UK-Continent the TC20 index has also dipped US$393,000 to US$3,575,000.
West of Suez, Mediterranean/East LR2’s went dormant again this week and TC15 index shed US$208,000 to US$2,891,667.
In the MEG, LR1’s took a major correction this week. The TC5 index dropped 27.81 points to WS145 and similarly for a trip to the UK-Continent, TC8, came down US$307,000 to US$2,964,000.
On the UK-Continent, TC16 remained level all week in the WS125-WS130 range.
MEG MR’s were subject to downward pressure this week again and as a result the TC17 index haemorrhaged 25 points to WS217.86.
UK-Continent MR’s were driven firmly upwards this week with tonnage scarcer that previous weeks and demand plentiful. TC2 shot up 18 points to WS178.25 and naturally TC19 also went from WS170.31 to WS188.44.
USG MR’s saw a recharge in freight levels this week after steady enquiry and vessel availability hindered by, amongst other items, Panama Canal delays. TC14 added 5.83 points to WSWS140.83 and TC18 likewise climbed 6.66 points to WS210.83. Meanwhile a run to the Caribbean on TC21 went from US$825,000 to US$845,833.
The MR Atlantic Triangulation Basket TCE climbed from US$25,129 to US$28,148.
In the Mediterranean, Handymax’s lacked enquiry this week and the TC6 lost 7.78 points to WS136.94
Up on the UK-Continent, Handymax’s continued firming albeit modestly and TC23 hopped up from WS178.33 to WS185.56
The market in the Middle East slipped a little again this week. Owners are seemingly keener on the shorter voyages while rates remain under pressure as tonnage builds up. The rate for 270,000 mt Middle East Gulf to China eased one point to WS47.29 corresponding to a daily round-trip TCE of US$19,431 based on the Baltic Exchange’s vessel description, US$2,300 per day lower than last Friday. The 280,000 mt Middle East Gulf to US Gulf trip (via the cape/cape routing) remained around WS30.
For the Atlantic market, the 260,000 mt West Africa/China rate was steady at the WS53 mark (which shows a round voyage TCE of US$28,200/day). The rate for 270,000 mt US Gulf/China was reduced by only US$27,778 to US$8,250,000 (about US$30,400/day round trip TCE).
Suezmaxes in West Africa have not fared very well again this week, but it would appear the floor has been reached with rates sideways at the latter part of the week. For 130,000 mt Nigeria/Rotterdam the rate has come off two points week-on-week and are now plateauing at the WS65 level (a daily round-trip TCE of US$10,975). In the Mediterranean and Black Sea region the tonnage list is building and the few cargoes available this week received much interest. For the 135,000 mt CPC/Med route rates have fallen two points to round the week out at fractionally below WS75 (showing a daily TCE of about US$9,500 round-trip). In the Middle East, the rate for 140,000 mt Basra/Lavera recovered 7.5 points week-on-week to WS67.83.
In the North Sea, the rate for the 80,000 mt Hound Point/Wilhelmshaven rote has gained a meagre one point to WS97.14 (showing a round-trip daily TCE of US$1,800, still US$300/day less than last Friday). In the Mediterranean market the rates struck bottom and owners collectively pushed, and got, increased fixing levels. The rate for 80,000 mt Ceyhan/Lavera gained 9.5 points to WS98 (a daily round trip TCE of US$10,700).
Across the Atlantic, in the Stateside Aframax market, rates for the shorter voyages have ceased to decline. For the 70,000 mt East Coast Mexico/US Gulf route, the rate modestly rose 1.5 points to WS105 (which shows a TCE of US$7,631/day round trip, in line with last Friday’s value) and for 70,000 mt Covenas/US Gulf the rate has stabilized at WS97.5 (a round-trip TCE of US$7,420/day, about US$600/day less than a week ago). The rate for the trans-Atlantic route of 70,000 mt US Gulf/Rotterdam, however, has been reduced by five points to WS114.06 (a round trip TCE of US$16,737 per day).
Sights have been firmly set on the upcoming switch from ‘Summer’ to ‘Winter’ market with owners and brokers feeling that rates are on the rise. As laycans for cargoes begin to be shown for Q4 2023 vessels have been weighing up the potential spikes versus current spot rates and as a result are asking for higher numbers to compensate potential losses. It would take several fixtures to give clear indication of where the rates could be heading but with only a handful of enquires out there, and those shown being fixed on various ship sizes, it is hard to ascertain clarity. One 145,000 Steam Turbine ship was reported fixed for up to 50 days in the high US$60,000’s in the East for intra-basin but with little else seen on the larger ships definitive estimations vary for what a Baltic standard LNG vsl should pay.
The index itself moved positively this week with BLNG1g Aus-Japan gaining over US$10,000 to close at US$85,484. While in the Atlantic BLNG2g US-Cont made greater gains to close at US$91,676 but the biggest mover of the week was certainly BLNG3g where US-Japan increased by nearly US$35,000 to finish at US$129,656. A big part of this gain is explained by the optionality left for owners after completing a voyage East, by the time they reposition they may have only enough time to fix one to two cargoes in a market, which has the potential to be five to six times higher than current spot levels so greater premiums are being expected (but of course though there is no guarantee than market levels will reproduce the highs of 2022).
A particularly quiet week has had the expected result on the index, with few reported fixtures and two holidays in the east (Singapore and Japan) there wasn’t much driving force in the market. Rates were kept flat/soft as a relatively healthy tonnage list offset the fixing that was done. BLPG1 Ras Tanura-Chiba fell by US$3.357 over the week closing out below US$100 at US$99.857, which gives a daily TCE earning on a round voyage at US$83,042. Despite the fall the rates are still quite high given that for the first five months of the year the index was only briefly up towards triple digits. New acceptances coming out could breathe some life into the rates though; but as we stand the market is flat.
Again, the Panama Canal and weather systems in the East are driving factors in current fixing patterns in the US. Laycans are moving further out while charterers look to take cover on cargoes with ships with firm itineraries. The week saw several vessels being fixed away, but the rates paid no mind and remained steadfastly flat. BLPG2 Houston-Flushing shifted only 40 cents on the week to close where it started at US$96.6 with a daily TCE earning of US$107,207. This flatlined rate was mirrored for BLPG3 Houston-Chiba where after a brief rise the index fell overall by 50 cents to close at US$167.929 (with a daily TCE earning of US$87,540).