A weekly round-up of tanker and dry bulk market (Jan 5, 2024)

The Baltic Exchange, a wholly-owned subsidiary of Singapore Exchange, is the world's only independent source of maritime market information for the trading and settlement of physical and derivative contracts.

Its international community of over 650 members encompasses the majority of world shipping interests and commits to a code of business conduct overseen by the Baltic.

For daily freight market reports and assessments, please visit www.balticexchange.com.

Capesize

This week the capsize market has been marked by a mix of activities and challenges. Despite a slow start following the Christmas and New Year break, the Pacific market saw two active miners, contributing to a somewhat optimistic sentiment initially. However, reports of a derailment in Western Australia introduced an element of uncertainty, leading to a decline initially of approximately $1.00-US$1.20 on C5 at the beginning of the week. The Atlantic market also faced challenges, with a tightening tonnage list and a widening gap between bid and offer prices. Despite heightened activity in the Pacific on Thursday, the market pressure resulted in a further decline on C5, although there was a feeling that the market was starting to find a floor. This appears to be the case with two miners today having to increase their bid to attract offers, resulting in a slight uptick of approximately 30 cents today C5 as the week draws to a close. In the Atlantic, vessel tightness persisted, particularly for tonnage reaching south Brazil within January dates. Limited activity was observed for the first half of the week, but the prevailing tight conditions, coupled with an increase in activity towards the end of the week, resulting in positive reports of stronger fixtures, has maintained a bullish, yet positional, sentiment in the market. Overall, the BCI 5TC has been positive this week, which started at US$28,896 and has closed today at US$31,497.

Panamax

Following the Christmas holiday, the Panamax market began sedately across the board, followed by rates coming under pressure from the outset. Downward pressure emanated primarily from a build-up of tonnage, unfixed over the festive period but also from a lack of demand in both basins all week, forcing cheaper levels to be conceded by owners. Following a softer finish to 2023, higher ballaster count from Southeast Asia only compounded to the weaker market. And, with Asia massively unsupported, the immediate outlook appeared extremely bearish; US$13,000 was agreed on an 82,000-dwt delivery China for a NoPac round trip but such rate unrepeatable come the end of the week. From the Atlantic, US$24,000 was agreed on an 85,000-dwt delivery NW Africa for a long duration trip via US Gulf into the Arabian Gulf with routing via Cape of Good Hope. Some recent period coverage emerged with reports of an 82,000-dwt delivery China achieving US$16,250 for one year’s period.

Ultramax/Supramax

Not surprisingly it was a rather muted start to the New Year after the widespread holidays. The Atlantic remained rather sluggish in the South with limited fresh enquiry appearing and a good amount of prompt tonnage available. As the week progressed, some saw slightly better levels of enquiry from the US Gulf although limited fixing appeared. From Asia, brokers suggested that there was little fresh activity from the NoPac and Australia although there seemed to be a reasonable amount of activity from the South. There was little period action although a 63,000 open China was heard fixed for four to six months trading redelivery Singapore-Japan at US$17,000 with scrubber benefit for charterers. From the Atlantic, a 63,000-dwt was heard fixed delivery US Gulf trip redelivery East Mediterranean at US$26,000. In Asia, a 56,000-dwt fixed delivery Philippines trip via Indonesia redelivery South China at US$12,000. From the Indian Ocean, rates remained fairly healthy, a 64,000-dwt fixing delivery Navalakhi trip via Oman redelivery Chittagong at US$20,000.

Handysize

After recent holidays, the Atlantic market witnessed large corrections on BHSI this week, with cargo availability limited across the region. On the continent, a 32,000-dwt was fixed basis delivery in Rouen for a trip to Morocco with grains at US$11,000, whilst in the Mediterranean a 35,000-dwt fixed from Safi to EC South America at US$7,000 and a 38,000-dwt was rumoured to have fixed from Alexandria to Bilbao with an intended cargo of steels at US$11,000. The US Gulf also saw reductions as a 39,000-dwt was rumoured to have been fixed from SW Pass to the Black Sea with grains in the low US$20,000’s. In the South Atlantic, a 37,000-dwt fixed from Santos to Morocco with a cargo of sugar at US$20,000, whilst a 43,000-dwt fixed from Recalada to Venezuela with a cargo of grains at US$22,000. Asia was more balanced with an unknown handy fixing from China via Indonesia for a round trip at US$9,200 but further information was limited.

Clean

LR2

LR’s in the MEG had a sharp downturn this, albeit short, week for Baltic Rate publications. The 75Kt MEG/Japan TC1 index lost 23 points to WS169.44. The 90kt MEG/UK-Continent TC20 run to the UK-Continent also shed US$275,000 to US$4,940,000.

West of Suez, Mediterranean/East LR2’s on TC15 had a small tick up to the tune of just under US$57,000 taking the index to 4,525,000.

LR1

In the MEG, LR1’s have also fallen on price this week however not quite as harshly as the LR2’s. The 55kt MEG/Japan index of TC5 is currently marked at WS190.44 (-13 points) and the 65kt MEG/UK-Continent on TC8 dipped US$241,000 to US$4,120,000.

On the UK-Continent, the 60Kt ARA/West Africa TC16 index, remained relatively flat only with an incremental loss of 3.77 points to WS208.13.

MR

MR’s in the MEG like other sizes in the region saw freight value evaporate this week, the TC17 index shed 10% of its value coming off 27.43 points to WS233.71.

UK-Continent MR’s were repeatedly tested down this week, each market reported fixture consistently taking a chunk out of the market value. The 37kt ARA/US-Atlantic coast of TC2 at time of writing is pegged at WS129.4, dropping from WS154.2. On a TC19 run (37kt ARA/West Africa) the index has also come down 28.25 points to WS144.19.

The USG MR’s began the week lacklustre and then saw an influx of enquiry later in the week that looked to stem a resurge in rates for local discharge. TC14 (38kt US-Gulf/UK-Continent) went from WS163.5 to WS152.86. The 38kt US Gulf/Brazil on TC18 similarly dropped from WS234.57 to WS216.43. A 38kt US-Gulf/Caribbean TC21 trip bottomed out at US$644,000 down from US$742,000 to then rebound a little of the back of a widely reported fixture to US$696,000.

The MR Atlantic Triangulation Basket TCE went from US$27,753 to US$22,705.

Handymax

In the Mediterranean, Handymax’s were beaten down from WS240.28 to WS200.83.

Up in Northwest Europe, the TC23 30kt Cross UK-Continent suffered similarly to the Mediterranean and lost 23.28 points to WS197.

ALL WS RATES MENTIONED BELOW ARE BASIS THE 2024 WORLDSCALE SCHEDULE

VLCC

The market has been almost steady for this short week with the 270,000mt Middle East Gulf to China route only losing about half a point to WS57.23 which shows a corresponding daily round-trip TCE of US$27,395 basis the Baltic Exchange’s vessel description. It is reported that the second decade of January (10th-20th) is now covered and charterers are seemingly in no rush, considering the softer sentiment, to cover the third decade whilst also awaiting confirmation of February dates in about 10 days’ time.

In the Atlantic market, a similar situation has been seen with the rate for 260,000mt West Africa/China also dropping half a point to WS59.53 (which shows a round voyage TCE of US$30,855/day) while the rate for 270,000mt US Gulf/China eased off US$83,333 to US$7,900,000 (which translates to a round-trip TCE of US$30,082), although overnight an operator is reported to have taken two VLCCs at US$8,390,000 with options to the UK Continent at US$4,125,000 for the first decade February loading in the US Gulf.

Suezmax

Suezmaxes in West Africa have managed to push rates up this week with the rate for 130,000mt Nigeria/UK Continent route rising 17 points since Tuesday to WS135.62 (a daily round-trip TCE of US$52,730). In the Mediterranean and Black Sea region, the tonnage lists are more charterer-friendly and the 135,000mt CPC/Med route has climbed a comparatively meagre two points to WS140.73 (showing a daily TCE of US$59,985 round-trip). In the Middle East, the rate for 140,000mt Middle East Gulf to the Mediterranean eased five points to WS88.68, as some owners are keen to get back West to potentially capitalise on the rise in the Atlantic markets while the Eastern markets are quiet with minimal activity.

Aframax

In the North Sea, the rate for the 80,000mt Cross-UK Continent route has risen six points to WS180 (showing a round-trip daily TCE of US$69,820 basis Hound Point to Wilhelmshaven) which is now being assisted by the firming US Gulf market and bad weather conditions in Northwest Europe.

In the Mediterranean market the rate for 80,000mt Cross-Mediterranean has remained flat this week at the WS150 level (basis Ceyhan to Lavera, that shows a daily round trip TCE of US$36,435), with some vessels ballasting towards the US Gulf region.

On the other side of the Atlantic, the market has started a roller coaster ride, currently on a steep climb. The rate for 70,000mt East Coast Mexico/US Gulf (TD26) has risen 75 points since Tuesday to WS252.13 (a daily round-trip TCE of US$75,970) and the 70,000mt Covenas/US Gulf rate firmed 67 points to WS238.50 (a round-trip TCE of US$62,391/day). The rate for the trans-Atlantic route of 70,000mt US Gulf/UK Continent has shot up a stunning 90 points to WS280.50 (a round trip TCE basis Houston/Rotterdam of US$75,298/day) which has caught the attention of owners with Mediterranean and UK Continent tonnage availability, causing some of them to instruct their vessels to ballast towards the US Gulf.

LNG

We entered the new year with the continued stalemate for LNG freight pricing. A tighter tonnage list at the front end and some enquires had the potential to shift the tide of current pricing but with many cargoes being taken in internally or FOB tenders failing to materialise, there was not much to fundamentally shift the direction. A few optimisation opportunities are being talked about from Australia for end January/early February, but little has happened as yet. Rates themselves have remained flat, a break over Christmas and New Year meant that there was a bigger gap in the index than usual, but we saw negative movement across all three routes and both ship sizes. The 160cbm BLNG1g lost US$4,491 this week closing at US$64,221, meanwhile the 174cbm BLNG1_74g fell US$5,817 to finish at US$84,913. In the Atlantic, both 174cbm routes BLNG2_74g, and BLNG3_74g saw the biggest falls dropping US$9,000, and US$7,000 respectively to finish at US$109,000 and US$116,000. The 160cbm BLNG2g and BLNG3g finished slightly better but still down overall at US$89,000 and US$93,000 respectively.

Period has been quiet over the winter period, we published 6-months, 1-year, and 3-year with no change from the end of 2023 at US$92,267, US$96,000, and US$68,300 respectively.

LPG

We begin the new year with a short week, following the bank holiday on 1st January so there was not much fixing going on. Position lists being updated showed that most ships travelling to the US were doing so via the Cape of Good Hope. Any ships (of which one was reported) going via the Panama in ballast are Pmax ships. A relatively quiet fixing week in the East meant that BLPG1 hovered around mid-high US$130’s, gaining only US$0.857 on the week to give our first weeks close at US$137.143 and a daily TCE earning of US$126,439.

The Atlantic some would have expected to have upsets on rates with BLPG2 now being affected by the new EU ETS scheme which came into effect on 1st January. But with only one completed fixture that has an option into flushing fixed at US$120, and most brokers reporting little changes to rates its effect is yet to be realised. Rates themselves hovered around this level with BLPG2 closing at US$119.60 a daily TCE earning of US$143,905. BLPG3 had a correction mid-week after an initial rise to US$126 before closing at US$221 an overall fall of US$2.571 and a daily TCE earning of US$133,998.

Disclaimer:

While reasonable care has been taken by the Baltic Exchange Information Services Limited (BEISL) and The Baltic Exchange (Asia) Pte. Ltd. (BEA, and together with BEISL being Baltic) in providing this information, all such information is for general use, provided without warranty or representation, is not designed to be used for or relied upon for any specific purpose, and does not infringe upon the legitimate rights and interests of any third party including intellectual property. The Baltic will not accept any liability for any loss incurred in any way whatsoever by any person who seeks to rely on the information contained herein.

All intellectual property and related rights in this information are owned by the Baltic. Any form of copying, distribution, extraction or re-utilisation of this information by any means, whether electronic or otherwise, is expressly prohibited. Persons wishing to do so must first obtain a licence to do so from the Baltic.