THE BALTIC Dry Index continued its upward trajectory over the past week.
The index kicked off the week on Monday (18 September) at 1439, already 4.2% above the previous week’s high point of 1381 on Friday.
The index then climbed steadily throughout last week, winding up at 1593 on Friday (22 September) – an increase of 10.7% on the start of the week.
The Pacific market started with a positive outlook, maintaining healthy cargo volumes driven by substantial coal shipments from East Coast Australia to the Far East. Rates initially increased, but as the week progressed, a notable shift occurred. Owners began contemplating ballasting towards the Atlantic, creating additional pressure in the Pacific market. Despite the presence of all three major players mid-week, the Pacific market displayed signs of stability but later experienced a softening trend, which was partially attributed to a decline in the FFA market. Meanwhile, the Atlantic remained relatively quieter, with limited discussions and a shortage of prompt tonnage in the North Atlantic. South Brazil and West Africa to the Far East continued to be well supported, but rates for earlier dates softened and bid-offer spreads widened. Overall, the week saw fluctuating dynamics in both the Pacific and Atlantic markets, marked by shifts in sentiment and rates.
The week began positively in the Panamax sector, with both the Atlantic and Pacific basins well supported with good demand on all the major trades. However, as the week closed some of the gains appear to have been eroded somewhat. In the Atlantic, decent South America demand seen throughout, coupled with evidence of October arrival US Gulf stems, gave the market some impetus it had been lacking in recent weeks. However, ballast tonnage count now appears heavy, keeping a lid on rates as the weekend approached. Asia started with healthy demand ex NoPac and Australian mineral business, but like the Atlantic, the week appears to have tailed off a touch with wide bid/offer gaps appearing as a different opinion enveloped true market value. Period activity was evident, with several one-year deals concluded, including US$16,250 concluded on a scrubber fitted 82,000-dwt whilst US$15,000 agreed on a standard 82,000-dwt type delivery Taiwan.
A strong week overall for the sector. Sustained demand was seen from the US Gulf for fronthaul trips to Asia. Whilst strong demand was once again seen from the Continent, Mediterranean regions helping to keep rates at good levels. Tight tonnage availability was an aspect in the South Atlantic, although some cautioned that fresh enquiry was limited for October as the week closed. The Asian arena similarly saw stronger numbers being achieved throughout the week as enquiry from Indonesia remained abundant. The North also saw better demand both from the NoPac and for backhaul steel requirements from China to the Continent. Period cover was still sought. A 63,000-dwt open India fixing at US$16,000 for 5 to 7 months trading, whilst another 63,000-dwt open China fixed one year at around US$14,000. In the Atlantic, a Supramax was heard fixed from the Baltic to WC India at US$28,000. From Asia, a 63,000-dwt open South Korea was fixed for a NoPac round with wood pellets at US$16,000. A 63,000-dwt open North China was fixed for a trip to the Continent at US$12,750 for first 65 days and US$16,000 for the balance. Further south, a 63,000-dwt open South Vietnam fixed a trip via Indonesia redelivery South China at US$20,500.
In a largely positive week across a majority of sectors in the handy market, gains were seen in both basins. The Continent and Mediterranean saw increased cargo availability and limited tonnage with a 34,000-dwt fixing from the Immingham to the Mediterranean at US$22,000. The Black Sea was also active, with a 28,000-dwt fixing from Constanta to Morocco with an intended cargo of grains at US$17,000 to a grain house. The South Atlantic has seen levels contract due to a lack of fresh enquiry and a 34,000-dwt was fixed from Recalada to East Coast India with an intended cargo of petcoke at US$19,000. In the US Gulf, a 37,000-dwt was fixed from Mobile to the Continent with an intended cargo of pellets at US$14,500. Activity was said to have been limited in Asia, but a 37,000-dwt was linked to fixing from CJK to Southeast Asia in the US$9,000s. A 35,000-dwt was fixed from San Francisco to intention China at about US$14,000.
The BCTI finished the week at 869, up from 849 the previous week.
Rates for MRs in the US have flattened out slightly following the steady falls experienced since September. TC14: 38k US Gulf/UK-Continent finished the week unchanged at WS87.08. TC18: the MR US Gulf/Brazil came off more gradually from WS177.08 to end the week at WS170 (-WS7.08). TC21: MR US Gulf/Caribbean fared better increasing and peaking at US$535,833 (+US$19,166).
On the UK-Continent, MRs freight levels have been steadily increasing with TC2: 37k UK-Continent/US Atlantic Coast finishing the week at WS192.25, (+WS13.75). TC19: 37k Amsterdam to Lagos, followed suit and finished at WS201.88 (+WS13.13).
The recent September gains on the LR1’s of TC16 60k Amsterdam/Offshore Lomé flatted out over the course of the week finishing at WS165.63 (-WS2.5).
West of Suez, on the LR2’s, TC15: 80k Mediterranean/Japan, continued to remain steady ending the week at US$2,945,833, a small gain of US$33,333 from the week before.
In the Middle East Gulf freight rates for LR’s have softened with TC1: 75k Middle East Gulf/Japan, falling from WS141.11 to finish the week at WS135.28 (+WS5.83) a round trip TCE of US$26,326/day. This has had a knock-on effect on MRs with TC17: 35kt Middle East Gulf/East Africa, showing losses resulting in a decrease of WS26.42 points to WS264.29 a round trip TCE of US$29,974/day.
LR1’s have also seen a similar losses over the last week with TC5: 55k Middle East Gulf/Japan, steadily decreasing WS7.19 to WS162.19. TC8: Middle East Gulf/UK Contintent, again rates softened slightly throughout the week finishing at US$51.70/mt (a lumpsum equivalent of US$3.36 million).
The market saw a turnaround in rates across the board, which started in earnest midweek. The rate for 270,000 mt Middle East Gulf to China climbed 12 points to WS49.88 corresponding to a daily round-trip TCE of US$21,852 basis the Baltic Exchange’s vessel description. The 280,000 mt Middle East Gulf to US Gulf trip (via the Cape/Cape routing) was assessed 3.5 points higher at WS26.89.
For the Atlantic market, the 260,000 mt West Africa/China rate rose eight points to WS51.65, which shows a round voyage TCE of US$25,192/day. The rate for 270,000 mt US Gulf/China climbed US$883,333 to US$8,094,444 (US$27,843/day round trip TCE).
Suezmaxes in West Africa continue to struggle, with the rate for the 130,000 mt Nigeria/Rotterdam trip losing another 11 points to WS66.82 (a daily round-trip TCE of US$11,949). In the Mediterranean and Black Sea region, the 135,000 mt CPC/Med route was held again at the WS72.5-73 level (showing a daily TCE of US$7,566 round-trip). In the Middle East, the rate for 140,000 mt Basra/Lavera increased by two points to WS61.61.
In the North Sea, the rate for the 80,000 mt Hound Point/Wilhelmshaven route slipped back four points to the WS90 region (showing a negative round-trip daily TCE of about -US$2,800). In the Mediterranean market, the rate for 80,000 mt Ceyhan/Lavera showed signs of a recovery, climbing 24 points by the end of Thursday to WS108.61 (a daily round trip TCE of US$16,800), and the climb will likely continue with overnight reports of WS112.5 being on subjects for a TD19 trip.
Across the Atlantic, in the Stateside Aframax market, a different story unfolds with the rate for 70,000 mt East Coast Mexico/US Gulf losing 11 points to WS80 (which shows a negative TCE of -US$3,300/day round trip) and for 70,000 mt Covenas/US Gulf the market rate was reduced 10 points to WS90.71 (a round-trip negative TCE of -US$377/day). The rate for the trans-Atlantic route of 70,000 mt US Gulf/Rotterdam shed another 10 points this week to settle at WS90 (a round trip TCE of US$7,045/day).
In Australia, Chevron has accepted the FWC’s offer to end the LNG strike and Freeport LNG has restarted after some unplanned outage with feed gas to the facility, while Japan reported that their monthly LNG imports has continued to decline by around 9.6% year on year. A mixed bag of news for LNG but on the freight side increased cargo requirement has meant that rates are again slightly bolstered as we continue the steady steam towards winter.
BLNG1g Aus-Japan rose slowly, gaining a few thousand to close at US$192,523. There are reports of fixtures happening but with caveated availability or delivery windows, these have not pushed rates too much. The Atlantic market move in a similar fashion, BLNG2g US-UKCont rose by US$13,473 to close at US$196,442 while US-Japan BLNG3g saw the lowest gains of all three and closed at US$224,834. All three routes with positive endings and sentiment in market high, the upcoming winter is expected to be quite fruitful for owners and brokers alike.
It was quite a week for LPG. Across the board of the previous highest 22 index publishing rates since 2004 12 of these have fallen in September of this year alone. The rates have risen quite a lot this week, as well with BLPG1 Ras Tanura-Chiba rising US$25 to finish at US$183.286 the highest recorded rate on the Baltic Index. This gives a daily TCE Earning of US$175,838: a rise of US$28,267, which was again the highest TCE earning that the Baltic has published since we began doing TCE. A busy market, especially ex-India where owners have almost picked rates out of the air and still have been fixed, coupled with a tighter tonnage list, has kept momentum up and the fixing window is now way out to when ships who are theoretically in the fixing window still have quite murky itineraries, which have the potential to cause some headaches down the line.
The US has copied a similar feat as the Middle East. The Baltic has published US$249.714 for Houston-Chiba (a daily TCE equivalent of US$154,213), a rise of US$27.285 on the week but the highest recorded price ever on this run. September has been bullish throughout, but this final push up is a rise of nearly US$50 over the month. Owners are capitalising on plenty of cargoes, along with huge delays in the Panama, resulted in continued product being pumped and cargoes chasing ships, suggesting that this bull run has not quite ran out of steam yet. BLPG2 Houston-Flushing has also risen, although liquidity remains less on this route. Rates gained US$11.6 to finish at US$135.2, giving a daily TCE earning of US$162,421.