THE BALTIC Dry Index declined this past week from a peak in the previous week.
The index rounded out the week at 1080 on 25 August. This was a decline of 13% on the previous Friday’s index of 1237, which was 10 points down on a peak on the previous day.
In the Pacific, the week began with promising involvements from all three majors, yet this enthusiasm did not translate into substantial market gains, yielding a relatively stagnant atmosphere. As the week unfolded, Pacific trading maintained a decent cargo volume, although the presence of surplus tonnage limited potential gains and led to a relatively stable market.
In the Atlantic, a pattern emerged where increasing offers were noted, particularly from South Brazil and West Africa to the Far East, despite relatively thin enquiry in the North Atlantic. However, as the week progressed, activity in the Atlantic experienced fluctuations.
The midweek saw an increase in Pacific activity, yet freight rates remained relatively flat. Simultaneously, the North Atlantic continued to exhibit minimal activity and scant enquiry, contributing to an overall subdued sentiment. The latter part of the week witnessed a persistently bearish outlook in the Pacific, marked by reduced activity despite the engagement of key market players. Contrary to initial hopes of stabilisation, further declines were evident, notably on the C5 route.
Meanwhile, in the Atlantic, the activity saw a mild decrease following a series of fixtures concluded earlier in the week. Brokers noted an increase of vessels in ballasts, adding to the prevailing bearish sentiment in the market. Overall, the week encapsulated a mixed performance in the Capesize market, with varying degrees of activities and sentiment shifts across the Pacific and Atlantic regions.
The Panamax market returned with mixed results this week. With limited activity emerging the North Atlantic drifted over the course of the week, a few signs of better fronthaul rates midweek failed to materialise into much. By comparison, EC South America saw a healthy level of demand both for September and October arrivals and rates stabilised the latter part of the week, US$13,500 around the mean average for BPI82 types of delivery Southeast Asia/India region. In Asia, a smattering of NoPac fixtures emerged mid-week with rates in the US$11,000s and whilst trips via Indonesia and Australia to India paid a small premium to standard Pacific rounds, rates overall were pegged down as demand ex Indonesia failed to materialise and pressure grew on an increasing tonnage count. Limited period talk this week however we end the week with a positive push from the FFA market, enabling some owners to remain cautiously optimistic.
It was a two-sided affair over the week. As sentiment remained positive in the Atlantic, a healthy demand from key areas such as the US Gulf and EC South America combined with better levels of cargo from the Continent-Mediterranean saw stronger numbers being achieved. A 58,000-dwt fixing delivery SW Pass for a trip Singapore-Japan at US$16,500. A 58,000-dwt was also fixed delivery West Africa trip via Morocco redelivery EC India at US$15,000. From Asia, a change in direction occurred with a buildup of prompt tonnage as less fresh enquiry entered the market from Indonesia. Further north, some described a finely balanced market but again less enquiry was seen. A 58,000-dwt fixed delivery Ko Sichang via Indonesia redelivery WC India at US$8,500. Sustained activity from the Indian Ocean, a 63,000-dwt fixing delivery Jebel Ali trip redelivery Bangladesh at US$14,000. Period enquiry remained active, a 63,000-dwt open South Africa fixing 10-12 months redelivery worldwide at US$14,000.
Whilst there was minimal visible activity, bullish sentiment remained for owners across the handy sector. The summer season is drawing to a close across Europe and a 37,000-dwt was fixed basis delivery passing skaw via the Baltic to the USEC with an intended cargo of grains at US$8,500 whilst improved levels were also seen in the Mediterranean.
Tonnage availability in the South Atlantic and US Gulf regions was also still evident and owners were said to be seeing improving levels. In Asia, it was more balanced but a 38,000-dwt opening in Indonesia was fixed via Western Australia to China with an intended cargo of concentrates in the US$13,000’s and a 37,000-dwt was fixed from Tarakan via Indonesia to China with coal at US$10,500. Period interest was also still evident from charterers with a 28,000-dwt being fixed basis delivery in China for 3 to 5 months at US$9,000 and rumours of a 35,000-dwt opening in Japan fixing at US$10,500 for a similar period.
LR2’s in the MEG have simmered along this week with just enough enquiry to prevent freight levels degrading. TC1 has hovered around the WS130-135 mark (a Baltic TCE of around US$27,000/day). Meanwhile a run to the UK-Continent on TC20 also bubbled up and down around the US$3.6-3.8m level, with the round trip TCE around the US$30,000/day mark.
West of Suez, Mediterranean/East LR2’s saw a US$112,000 improvement on TC15 taking the index up over US$2.9m and the round trip TCE back to four figures (US$3,082/day).
In the MEG, LR1’s were put under pressure this week after starting positively. The TC5 index was ultimately squashed to the tune of 7.82 points to WS144.06 and similarly for a trip to the UK-Continent on TC8, after peaking at US$3,339,000 sunk back down to US$3,200,000
On the UK-Continent, TC16 ticked 6.87 points firmly back over the WS130 mark to WS135.31.
MEG MR’s climbed early in the week to see the TC17 index peak at WS281.43 after a handful of market reported fixtures at WS280 level. The index has since been retested back down to WS274.29.
UK-Continent MR’s were poised this week from supply and demand balancing freight on a knife edge. TC2 has held in the WS200-205 region with TC19 also floating around WS210-215 level.
USG MR’s upward trajectory slowed down this week and even saw some softening. TC14 shed 5.83 points to WS152.5 and TC18 dipped 4.58 points to WS242.5. Meanwhile a run to the Caribbean on TC21 sunk back under the US$1,000,000 mark to US$916,000 after a widely reported fixture at US$925,000 late in the week.
The MR Atlantic Triangulation Basket TCE dropped from US$35,032 to US$34,676.
In the Mediterranean, Handymax’s improved for the second week on week and the TC6 index accrued 32.22 points to WS254.44. This took the Baltic round trip TCE back over the US$40,000/day mark for the run. Meanwhile up on the UK-Continent, the TC23 index remained stable at the WS185 mark again all week.
The Middle East VLCC market looks to have bottomed out this week with little business working in the open market. For the 270,000 mt Middle East Gulf to China voyage the rate dipped by 1.45 points to WS44.13. This shows a daily round voyage TCE of US$16,688/day based on the Baltic Exchange’s vessel description. The rate for 280,000 mt Middle East Gulf to US Gulf (via the cape/cape routing) is assessed a further 0.16 points lower, holding around the WS26 mark.
In the Atlantic, the 260,000 mt West Africa/China held flat around the WS51-52 level, showing a round-trip TCE of US$28,000/day. The rate for 270,000 mt US Gulf/China climbed US$111,111 to US$8,400,000 (US$33,274/day round trip TCE) off the back of a couple of fixtures with improved levels.
The rate for 135,000 mt CPC/Augusta stepped up and incremental two points this week to WS72.8 (a round-trip TCE of just under US$9,500/day). In West Africa, the 130,000 mt Nigeria/Rotterdam voyage was more active this week. Freight levels ticked up over the WS70 mark to WS75.45 (+6.59) (a daily round-trip TCE of about US$19,586/day). In the Middle East, activity levels were minimal seeing the 140,000 mt Basra/Lavera drop to just under WS60.
In the North Sea market, rates for the 80,000 mt Hound Point/Wilhelmshaven climbed optimistically to WS105 (+8.57) (a round-trip daily TCE of US$9,497). In the Mediterranean, the rate for 80,000 mt Ceyhan/Lavera also took a small positive jump to the tune of 2.5 points to WS108.72 (a daily round-trip TCE of US$18,106). Across the Atlantic, the Stateside Aframax began to show signs of rebounding. The rate for 70,000 mt East Coast Mexico/US Gulf improved by 4.06 points to the WS130’s region (about US$21,722/dayround-trip TCE). Meanwhile, the rate for 70,000 mt Covenas/US Gulf ticked up 0.62 points to WS120 (a daily round-trip TCE of US$18,240). For the transatlantic route of 70,000 mt US Gulf/Rotterdam, rates similarly eased upwards, rising 2.19 points up over the WS120 mark to WS121.25 (showing a round-trip TCE of US$20,920/day).
There was some positive news for Australian LNG producer Woodside this week, as it seems there has been an ‘in principle’ agreement made to stave off further strikes. With most LNG fixing focussed on the Pacific, this has further help boost an already rising LNG market.
BLNG1g Aus-Japan gained US$13,748 over the week to finish at US$121,737, which is the highest rate we have seen since January when rates topped out at US$149,625. However, this rise in rates is unlikely cause as much strife as in the previous years where brokers do not expect us to see records of US$600,000 PD again, and with most major players covered (or pretty well covered) the interest in spot remains slightly muted. That being said, the cargoes quoted October-November laycans are able to command significant premiums and in LNG we never say never.
The Atlantic was a little quieter in terms of physical fixing with only one reported requirement working, this has not done anything to damper rates though as BLNG2g US-Cont rose US$14,284 to finish at US$115,945, which just like BLNG1g has not been repeated since the first week of January 2023. BLNG3g US-Japan gained the most with just shy of US$16,000 made on the week to finish at US$154,203 (and we hit the triple where rates only beat the print in the first week of January 2023). As expected, this longer route commands bigger premiums over the others while owners consider fixing now for laycans in October-November will likely see them miss the whole of the winter spike.
While it has been relatively flat out in the East, rates on the index shifted only US$1.2 down before rising a little to close at US$94.786 (a fall of US$0.50 cents on the week), but this still gave a pretty healthy daily TCE earning on a round trip of US$78,379. Brokers pushed rates down expecting a fall with current open tonnage outstripping potential cargoes but with little done there was not the impetus to see a rate fall and the week ended up slightly positive from the day prior.
For the US, it was a slightly bigger fall overall, but for the most part very flat. Rates for Houston-Chiba BLPG3 fell US$1 to close at US$168.643 giving a daily TCE earning of US$91,684. While Houston-Flushing shaved only US$0.8 cents to close at US$98.6, a daily TCE earning of US$111,423. The tonnage list is a little tighter and there are several reported uncovered cargoes to be working, which explains the maintenance of the current rates but does not seem to be able to push rates further up either.