Baltic Stock Market Report | Peripheral markets
A weekly overview of the tanker and dry bulk market (May 13, 2022)
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The Capesize market was booming as rates jumped across all regions. 5TC ended the week at $32,733, up 8,731 week-over-week. As the Shanghai Covid situation continues to hamper vessel movements across all sectors, the Capesize market looks capable of pushing as good tonnage demand is coming from Brazil and Australia. The C5 Western Australia to China route now sits at $15.077 – and the C3 Brazil to China route at $34.64 – both just off their highs reached for the year on Thursday. These travel levels correspond to a C14 Brazil China ballast of $31,050 and a C10 transpacific of $37,792. The C16 Backhaul continues to amaze and disturb, pegging the week at $28,500, more than $5,000 above the transatlantic C8, with some suggesting it’s the new fronthaul route. This high valuation continues to be largely driven by demand for coal in Europe, with energy prices remaining at elevated levels.
It’s been a mixed week on the BPI. After a positive start, activity and sentiment softened at the close. In the North Atlantic, an open Spain of 80,000 dwt has secured a voyage from the northern coast of South America to Saudi Arabia with a new Skaw-Passero delivery at $28,000. An open Jorf Lasfar of 85,000 dwt set via the north coast of South America to India at $45,000. On the east coast of South America, activity slowed, but a fixed 81,000 dwt from Recalada to Southeast Asia at $27,500 plus a ballast premium of $1,750,000. In the Pacific, activity remained positive with a fixing of 82,000 dwt from China via the North Pacific USA towards the Singapore-Japan range at $27,000. An 85,000 dwt set from northern China via the east coast of Australia. The period was also active with 82,000 dwt open in the Persian Gulf for nine to 12 months with new world delivery at $29,000. An opening of 82,000 dwt in China has been set for six to eight months at around $31,000.
A rather positional week with mixed sentiment in many areas. The Atlantic saw a slight correction in the US Gulf as rates eased, while more demands were heard from the South Atlantic at the end of the week. From Asia, better levels were generally observed. However, a lack of coal imports from Indonesia to China tempered rates. Period activity remained, but most activity was kept under the radar. An open Turkey of 63,000 dwt was fixed for 10-12 months at around $30,000. Pressure eased in the US Gulf and a 56,000 dwt was set for transatlantic delivery to the eastern Mediterranean at $40,000. Elsewhere, a 58,000 dwt opened in West Africa pegged a trip to China at $35,000. From Asia, activity was limited, but an open Indonesia of 56,000 dwt pegged a trip to Thailand at $24,500. Good levels were seen in the Indian Ocean with 55,000 dwt setting delivery from South Africa to the Far East in the low $30,000s plus an average ballast bonus of $600,000.
The BHSI remained broadly positive. However, the United States Gulf made significant negative moves as a 38,000 dwt was secured from the United States Gulf to Spain with a coal cargo forecast at $30,000. A 36,000 dwt also secured from Savannah to the UK-Continent range with an expected cargo of wood pellets at $30,000. A 37,000 dwt was set for a voyage from Houston to the Eastern Mediterranean with an expected cargo of petroleum coke at $35,000. The east coast of South America appears to have peaked at present with levels stabilizing and a fixing of 30,000 dwt from Itaqui to the Black Sea excluding Russia and Ukraine at 35,000 $. A 36,000 dwt was rumored to have been secured from Recalada to the west coast of South America at $52,000. In Asia, a 38,000 dwt open in China was set for a minimum of four to around six months at $36,500 and a 38,000 dwt open in South Korea was set for three to five months at $35,500 .
To do the housework
In the Middle East Gulf, LR dynamics still appear to be favoring westward travel at this time. TC1 75k Middle Eastern Gulf/Japan, after plateauing at a shadow above WS300, then gradually dropping to the WS290 highs at the end of the week. The LR1s have followed suit with their big sisters. TC5 55k Middle East Gulf/Japan stopped at WS320 mid-week and then settled back around the WS315 mark. Westbound LR1s held up all week, dropping from around $4.75m to $4.95m.
TC17 MRs appear to have drifted into a quieter mode this week and thereafter we saw the index drop 25 points to WS390. West of Suez on LR2s, the TC15 80k Mediterranean/Japan saw a further rise as tonnage turned more to the firmer Middle East for employment. The benchmark ended at $4.79 million (+$883,000) at the end of the week and broke above $20,000/day TCE.
The LR1s of the TC16 60k Amsterdam/Offshore Lomé, rose steadily this week to WS240.71 (+16.42), a round trip TCE of $37,521/day. On the UK Continent, the MRs softened a little following failing subjects on certain charters and the lengthening of the tonnage list. TC2 37k UK-Continent/US Atlantic Coast fell from WS327.22 to WS335 mid-week then saw a decline to end at WS321.11. TC19 moved in tandem with TC2 and was pegged at WS335.57 at the end of the week.
The USG MR market was reduced in open activity this week. TC14 38k US Gulf/UK-Continent lost 55.71 points to WS174.29 and TC18 MR US Gulf/Brazil lost 85 points to WS220.
The Baltic Handymax market was a little more active with TC9 30kt Primorsk / Le Havre up 42.86 points at WS425. In the Mediterranean, TC6 30kt Skikda/Lavera has been steady this week holding around WS290 highs – WS300 lows.
VLCC rates continued to lose ground this week. 280,000 mt Middle East Gulf/USG (via Cape of Good Hope) is rated one point lower at WS22.5, while the 270,000 mt Middle East Gulf/China trip is rated at 2.5 points just above the WS40 mark (one round travels TCE minus $10,800 per day). In the Atlantic, fares have also been reduced slightly with 260,000 mt West Africa/China now quoted one point lower at a fraction lower at WS43.5 (minus $6,300 per day round trip TCE). For the 270,000 ton trip from the US Gulf to China, the market fell $150,000 to $5,137,500 (a round trip TCE minus $8,600 per day).
Fares for the 135,000 mt Novorossiysk/Augusta fell seven points this week to just under WS127 (a round trip TCE of $30,100 per day). In West Africa, meanwhile, the 130,000 tonne Nigeria/UKC market continued to climb steadily, gaining seven points to just over WS90, showing a round trip TCE of $9,200 per day. . For the Basra/Western Mediterranean route of 140,000 mt, fares remained stable at WS45.
The 80,000mt Ceyhan/Mediterranean market declined this week, losing 12.5 points around the WS145/147.5 region (a round trip TCE of $21,300 per day). In Northern Europe, the rate for 80,000 mt Hound Point/UK Continent fell 12 points to settle in the WS142.5/145 range (a round trip TCE of $18,800 per day). In the Baltic Sea, with the ongoing war in Ukraine and the impending entry into force of UK and EU sanctions, fares for the 100,000 tonne Primorsk/UK Cont voyage continue to be assessed by our panelists and have the route a measly four points lower at just below the WS205 mark (a $57,300 round-trip TCE per day). Across the Atlantic, the Aframax market continued its downward trend. Fares for the 70,000 mt EC Mexico/Gulf of the United States short-haul route fell 3.5 points to WS141.5 (a round trip TCE of $7,700 per day) and for the 70,000 mt Caribbean/US Gulf fares fell 2.5 points to WS136.5 (a round trip TCE of $6,200 per day). For the 70,000 mt US Gulf/British Mainland transatlantic journey, fares are slightly lower by one point at WS136.5 ($9,000 per day TCE round trip).
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