Chartering market at hand: Handysize and Supramax/Ultramax // week 25

The South Atlantic market remains quite active due to stable grain exports. Owners get additional support from a strong SAfr market, which pulls some of the ballasts from the Indian Ocean and WAfr. Supramax rates from ECSA hold steady, while Handysize levels have bounced off the bottom, adding $1k daily and $1-2/t.

Meanwhile, the USG segment stays under pressure, especially on transatlantic routes, where the cargo/tonnage imbalance is quite acute. Owners prefer to transfer vessels opening in NCSA and Caribs to ECSA rather than the Gulf of Mexico, but so far this has not helped owners to stop the rate cuts. Rates ex USG ports have dropped by $1-2k daily and $1-3/t over the week.

The Baltic & Continent Handysize and Supramax shipping markets remain slack. There is quite a noticeable surplus of tonnage in the region despite the ongoing ballaster outflow. Handysize and Supramax rates have sagged by another $1-2k daily in the basin, while transportation costs of fertilizers, scrap and other cargoes have declined by another $0.5-2/t depending on the route. Owners of Ultramax carriers feel a bit more confident.

Meanwhile, the market has perked up somewhat in the Black and Mediterranean Seas despite another major shipping event in Istanbul. Tonnage demand has grown slightly in the region due to increased shipments of steel products and construction cargoes to the USG, while grain traffic from Romania remains quite regular (primarily due to shipments of Ukrainian wheat and corn). Handysize inter-Med rates have bounced off the bottom ($1k daily up), while corresponding transportation costs of grain, minerals and other cargoes have added $0.5-1.5/t. Supramax rates hold steady so far.

In the Indian Ocean , the Supramax/Ultramax market continues to strengthen amid lively coal shipments from South Africa both to the Far East and Europe, as well as due to increased traffic of construction cargoes and fertilizers from the Persian Gulf. Corresponding rates have grown by another $1-2k daily and $1-2/t on all routes, except for the ECI-China/SE Asia. Positive trends prevail also in the Handysize segment given brisk shipments of steel products from India, as well as of general cargoes and fertilizers from the Persian Gulf. Relevant rates have risen by $1.5-2k daily and $1-2/t.

The Asia-Pacific market is looking mixed this week.

In SE Asia , Supramax/Ultramax time-charter rates have added another $1-2k daily amid lively traffic of coal from Indonesia to China and India. Voy-bss freights have grown slightly less significantly, by $0.25-0.5/t due to lower bunker prices in the region ($50/t down for VLSFO in Singapore). Meanwhile, the Handysize sector is weakening due to excessive tonnage list and limited cargo flow ex regional ports. Thus, rates bss SE Asia RV have decreased by $1-2k daily and $1-2/t, while levels bss Pacific RV have dropped by $4k daily on average and $7-9/t given weak demand from both Australian and US charterers.

The Far Eastern Supramax/Ultramax market is also dominated by negative sentiment: relevant rates have sagged by $1k daily and $0.5-1/t amid slower cargo traffic. Handysize owners have managed to raise short-haul rates slightly, by $0.5-1k daily and $0.25-0.75/t, due to healthy offer of steel products and other general cargoes for transportation from Chinese and Japanese ports in SE Asia. In the meantime, rates on back-haul routes largely hold steady.

***

Next week, an uptrend may continue in the South Atlantic as demand for Brazilian and Argentine grain with shipments in July - Aug remains high. The ECSA Suparamax/Ultramax market will most likely continue to get additional support from brisk cargo traffic ex South Africa. According to players, however, the inflow of ballasters from Europe, NCSA and Caribs may slow down the expected rate growth. At the same time, rats may continue to fall in the North Atlantic amid ongoing inflow of vessels from Europe with ETA in 1H July. The projected increase in cargo offer for July laycans, especially on F/H routes, may slow down the rate decline.

Supramax/Ultramax owners will most likely manage to raise shipping rates for SAfr coal and ore further, while the upturn in rates ex Persian Gulf, SE Asia and the Far East looks unlikely as the 1H July tonnage list is getting longer in these regions. Rates will be suffering additional pressure from the weakening of the FFA market.

Spot/ppt freight assessments on main trade routes ex BlSea & Med

Terms FIOS 1/1.

Spot/ppt freight assessments on main trade routes ex Baltic & Continent ports

Terms FIOS 1/1.

Spot/ppt freight assessments on main trade routes ex USG & ECSA

Terms FIOS 1/1.

Spot/ppt freight assessments on main trade routes ex Asia-Pacific

Terms FIOS 1/1.

Spot/ppt freight assessments on main trade routes ex Indian Ocean

Terms FIOS 1/1.