A weekly round-up of tanker and dry bulk market (May 6, 2022)

This report is produced by the Baltic Exchange.

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The Capesize market has made the most of the short working week as rates have lifted  strongly, with the 5TC now residing at US$24,002 — up US$6262 week on week. The positive  market sentiment was largely Pacific led yet that didn’t stop the Atlantic Basin and ballaster  trades from getting in on the act, as all regions posted big gains. Cargo levels in the north  Atlantic are heard to be poor yet a wide range of rate levels have been mentioned as the market struggles for visibility in the region as usual. The Transatlantic C8 now sits  discounted at US$17,200 to the Ballaster C14 at US$22,018, while the Transpacific commands a premium at US$27,754. A big mover and the focus of much market attention is the Backhaul C16 at US$18,475, currently pricing above the Transatlantic C8. Coal flows continue to be  strong, boosting this feeder route into Europe largely due to the current geopolitical situation.  The Capesize market flow remains anything but normal currently as premium and discount  routes appear to be swinging and unstable. 

A midweek physical and FFA surge gave the Panamax market some much needed impetus following a few fragmented weeks owing to holidays. Improved demand from the Americas  proved to be a key catalyst to gains in most markets this week as EC South America grain  impacted the gains seen both for tonnage open ex Mediterranean and Southeast Asia. In the North Atlantic there was reports of an 82,000-dwt delivery UK achieving US$31,000 for two laden legs within the Atlantic with spot TA rates, essentially with optionality, hovering slightly  lower with support found. The pick of the fronthaul trips appeared to be rumours of an 82,000-dwt delivery Sunda Strait via EC South America to Far east at US$33,500. Asia, which  was impacted by holidays, returned something of a two-tier market, with much of the  Indonesian coal trips discounted somewhat by the smaller/older tonnage. The longer trips  hovered around the US$23,000 mark via NoPac and Australia.

With many holidays over the last week, the sector had a rather lacklustre feel with limited  fresh enquiry in a few areas. In the Atlantic brokers said the US Gulf remained fairly strong  and some said there was an increase in demand from the Continent/Mediterranean regions. The Asian arena remained relatively flat. Period activity saw a 60,000-dwt fixing delivery  South Korea for minimum 24 months to maximum 28 months trading at US$22,250. In the  Atlantic, a 58,000-dwt was heard fixed from the North Continent for a trip to the East  Mediterranean at US$25,000. From South America, a 60,000-dwt fixed delivery Brazil trip to the  US Gulf at US$42,000. In Asia, limited information flowed but a 55,000-dwt open Cebu fixed a  trip West coast India at US$33,000 option East coast India at US$35,000. From the Indian Ocean a 55,000-dwt fixed delivery Durban trip to South Korea–Japan in the mid US$30,000s plus around mid US$400,000s ballast bonus.

In a week full of holidays and limited visible trading the BHSI retained a positive trend in both basins. The biggest moves came in East Coast South America with a 37,000-dwt fixing from Vitoria to the Continent with an intended cargo of pig iron at US$40,000 and a 38,000-dwt fixing  from Santos to the United Kingdom with an intended cargo of Sugar at US$42,000. The US Gulf has also seen large gains, with a 38,000-dwt fixing from the Mississippi River to Atlantic Colombia at around US$41,000. Also, a 37,000-dwt fixed basis delivery South West Pass to East Coast Mexico at US$40,000. In Asia, a 28,000-dwt open in Thailand fixed via Australia to South Korea with an intended cargo of sugar at US$24,500 and a 26,000-dwt open in Taiwan was fixed via Australia to China with an intended cargo of Alumina at $26,000.

In the Middle East Gulf the LR market has continued to drive upwards this week. LR2s of  TC1 75k Middle East Gulf/Japan climbed 51.43 points to WS288.57 returning just under US$60,000 /day round trip TCE. The LR1s have also pushed but with lesser traction. TC5 55k  Middle East Gulf/Japan came up to WS307.14 (+WS7.85). A trip west on TC8 rallied about  US$300,000 to the US$4.7m mark.  

West of Suez on the LR2s, TC15, the 80k Mediterranean/Japan run again showed encouraging signs and gained another US$150,000 to US$3.65m this week. The LR1s of TC16  60k Amsterdam/Offshore Lomé, look to have stabilised for the moment after rising 22.86 points to WS219.26, a round trip TCE of US$30,401 /day. 

In the Middle East Gulf TC17 remained flat around the WS420 mark for the week with activity levels stable. On the UK-Continent MRs saw continued fixing activity pushing freight rates, despite the available tonnage looking to have increased. TC2 37k UK-Continent/US Atlantic Coast climbed 24.44 points to WS327.22 and TC19 moved up to WS340.71 (+27.14). The USG MR market saw its resurgence continue this week, driven by sentiment. TC14 38k US Gulf/UK-Continent came up 46.43 points to WS237.14 and TC18 the MR US Gulf/Brazil trip took a larger jump to WS309.29 (+80). The MR Atlantic basket TCE rose from US$32,605/day to US$42,999/day.

The Baltic Handymax market continues to be tiered for the moment, TC9 30kt Primorsk/Le Havre saw a 25 point rise to WS375 by the end of the week. In the Mediterranean TC6 30kt  Skikda/Lavera’s plateaued this week from plenty of vessels available, rates remained in the  WS275-WS277.5 region all week, still returning around US$37,000 /day round trip TCE.

The VLCC sector continued on the downward path with 280,000mt Middle East Gulf/USG (via Cape of Good Hope) being assessed about 1.5 points lower than last week to slightly below WS24.5. In the 270,000mt Middle East Gulf/China market rates fell almost two points to WS44.7 (a round trip TCE of minus US$8,300 per day). In the Atlantic, the continued reduced  demand kept owners under pressure and in the 260,000mt West Africa/China market rates are almost three points lower than a week ago at a fraction below WS45.25 (minus US$6,200  per day round-trip TCE). In the 270,000mt US Gulf/China market the rate has lost another  US$425,000 and the latest assessment is a little over US$5.3m (a round voyage TCE of minus US$8,800 per day). 

Rates for the 135,000mt Novorossiysk/Augusta fell a further 25 points this week and the latest assessment is at the WS145 level (a round-trip TCE of US$41,300 per day). Overnight  reports detail an Italian charterer fixing at WS135 for a voyage similar to TD6. The market  continues to be under pressure, amid further uncertainty on oil from Novorossiysk post-EU  sanctions. In West Africa meanwhile, rates have marginally picked up. 130,000mt  Nigeria/UKC is rated 3.5 points firmer at WS79 (a round-trip TCE of US$870 per day). For the 140,000mt Basrah/West Mediterranean route, the rates have eased one point to just above WS45.

The 80,000mt Ceyhan/Mediterranean market saw an improvement this week, recovering  eight points to around the WS157.5-160 region (a round-trip TCE of US$24,500 per day). In Northern Europe, the rate for 80,000mt Hound Point/UK Continent were flat at the WS155 level (a round-trip TCE of US$22,600 per day). In the Baltic Sea, sentiment has led the market  to decline heavily again. The 100,000mt Primorsk/UK Cont trip is assessed 72 points down on last week’s rate at around the WS212.5-215 level (a round voyage TCE of US$59,100 per day), with more uncertainty on this in light of the up-coming EU sanctions. Across the  Atlantic, the Aframax market saw a continued decline with rates for the shorter-haul 70,000mt EC Mexico/US Gulf route falling about 22 points to close to the WS157.5 mark (a round-trip TCE of US$11,200 per day). For the 70,000mt Caribbean/US Gulf trip, rates dropped 24 points to WS151.5 (a round-trip TCE of US$9,100 per day).In the 70,000mt US Gulf/UK Continent market, rates are down 18 points week-on-week at the WS150 level (US$11,200 per  day round-tip TCE). 

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