Bancosta Weekly Market Report – Week 37,2023

Credit: world wide market reports

Turkey crude oil exports

2023 so far has been another positive period for crude oil trade,despite the high oil prices and risks of economic recession.

In Jan-Aug 2023, global crude oil loadings went up +7.0% y-o-y to 1,440.7 mln tonnes, excluding all cabotage trade, according to vessels tracking data from Refinitiv.

This was well above the 1,346.5 mln tonnes in Jan-Aug 2022 and the 1,240.3 mln t of Jan-Aug 2021, but also slightly above the 1,397.3 mln tonnes in the same period of 2019. Exports from the Arabian Gulf were up +0.4% y-o-y to 581.0 mln t in Jan-Aug 2023, and accounted for 40.3% of global seaborne crude oil trade.

Exports from Russia have also increased by +4.7% y-o-y to 154.8 mln tonnes, or 10.7% of global trade.Shipments from the USA surged by +19.9% y-o-y to 126.4 mln tonnes.

From West Africa, exports increased by +0.5% y-o-y to 115.5 mln t.In terms of demand, seaborne imports into China increased by+23.0% y-o-y to 341.0 mln t in Jan-Aug 2023, 23.6% of global trade.Turkey is one of the largest exporters of crude oil outside The Arabian Gulf, and a major player in the Mediterranean oil market. This is so despite the fact that Turkey does not have any significant domestic oil reserves. Instead, it is a major export outlet for crude from Azerbaijan and from Northern Iraq.The majority of crude shipped from Turkey is Azeri BTC grade, sourced from the Baku-Tbilisi-Ceyhan pipeline. This is a 1768 kilometres long crude oil pipeline connecting the Azeri-Chirag-Gunashli oil field in the Caspian Sea to the Mediterranean Sea Coast.

Most of the rest of Turkish exports is Kirkuk grade oil from Northern Iraq. Kirkuk oil is sourced from the 970 kilometres long Kirkuk-Ceyhan Oil Pipeline, also known as the Iraq-Turkey Crude Oil Pipeline. Essentially all Turkish crude oil exports are loaded at the Ceyhan terminal. About 28% of volume loaded in Jan-Aug 2023 was carried in Suezmaxes, and about 70% was loaded on Aframaxes.

Capesize market 

Atlantic and Pacific basin

Good activity both in the Pacific and the Atlantic basins. In Pacific the major players had a robust presence in the market contributing to an increase in rates and in the Atlantic,improved fixtures on C3 also gave a solid support with upward rates from S Brazil and W Africa to F East. In Pacific, Mercuria fixed a TBN vessel to load a cargo of 160,000mt  +/- 10% iron ore from Port Hedland to Qingdao, laycan 27/29 Sept at a freight rate of $8.40/mt.BHP fixed a Berge Bulk TBN vessel to load their stem of 160,000mt +/- 10% iron ore from Port Hedland to Qingdao, laycan 26/29 Sept at $8.45/mt.FMG fixed a TBN vessel to load the cargo of 160,000mt +/- 10% iron ore

from Port Hedland to Qingdao, laycan 28/30 Sept at $8.55/mt. Rio Tinto also fixed two TBN vessels to load their cargo of 170,000mt +/-10% iron ore from Dampier to Qingdao, laydays 28/30 Sept; one at a freight rate of $8.25/mt and the other at $8.30/mt. Another TBN vessel was fixed by them for laycan 29 Sept/1 October at $8.55/mt.

JFE fixed a TBN vessel for a tender cargo of 170,000mt +/- 10% iron ore from Port Hedland to Japan, laycan 1/6 October at $8.30/mt.

A TBN vessel was fixed by Welhunt to lift a stem of 140,000mt +/- 10% coal from Newcastle to Xiamen, laycan 10/14 October at $12.35/mt. In the Atlantic basin, Vale fixed The VLoc Cape Apollo (230,000 dwt |2007 built) and two Newcastlemaxes to load their cargoes of iron ore from Tubarão to China for October Date, both fixed in the mid to high $19’s/mt level.

Trafigura fixed the MV Feg Success (182,619 dwt | 2010 built) to load a cargo of 170,000mt +/- 10% iron ore from Sudeste to Qingdao for 5/15 October laycan at $20.65/mt with the vessel’s ETA on the 9th Sept.

Anglo fixed two TBN vessels: one to load their cargo of 165,000-180,000mt iron ore from Açu to Bahrain, laycan 10/13 October at $15.60/mt and another for minimum 165,000mt to maximum 180,000mt of iron ore from Açu to Bahrain, laycan 10-16 November, on index linked basis. Kline fixed a TBN vessel from Cargill Metals to lift a cargo of 170,000mt +/- 10% from Pointe Noire toBahrain, laycan 1/7 October at $21.75/mt. LDC fixed the MV Semirio (174261dwt | 2007 built) to load a cargo of 170,000mt +/- 10% iron ore From Brazil plus West Africa to China, laycan 10 October onwards at $19.90/mt.

Panamax market

Atlantic basin

Generally speaking, a very positive week for the Panamax Atlantic market with activity remaining constant and rates rapidly increasing, with a slight adjustment in the closing days of the week. Regarding N Atlantic P1A_82 closed the week at $14,585/d, around $1,500/d better than the previous week. P2A_82 has been led by an healthy,minerals and grains demand with an 82,000 dwt 2016 built reported fixed at $24,000/d basis dely Cont for a trip via USG to Spore/Jpn range; this route ended the week with almost a $3,000/d gain compared to the previous Friday settling at $25,364/d. From S America, general bids for standard Kamsarmax averaged $14,5/15,000/d basis dely retro Spore on P6_82 route. An 82,000 dwt 2013 built was fixed at $14,600/d retro Spore on Sep 4 for an ECSAm fronthaul. On aps basis, a 2017 Kamsarmax got $18,500/d + 500,000 gbb for an ECSAm RV – eta Santos Beginning October.

Pacific basin

Another strong week, mainly driven by NoPac. Kamsarmax were fixed in the $12,000s/d level at the beginning of the week and went all the way up to high $13/14,000/d towards the end amid strong demand and relatively low availability of spot vessels.

Australia and Indonesia saw lower activity compared to NoPac with the former generating returns in the $13,000/d levels for Kamsarmax and the latter generating returns around $13,000/d for tonnage open in SE Asia for Indo-India and $17,000/d for tonnage open in the Philippines for Indo-Japan.

Going forward, we expect NoPac to stabilise as more tonnage is expected to become available in the N China/S Korea/Jpn range.

Supramax and handy size market

North America

Activity increased, but owners softened their ideas slightly. Fronthaul to China was fixed at $24,000/d on Ultramax and $20,000/d on Supramax with clean cargoes, TA trips were done around $20,000/d and $16,000/d respectively.

The Handysize market kept seeing increasing rates with trips to Med fixed at $12,500/d with scrap on a nice 32,000 dwt whilst wood pellets to Cont were done at $14,000/d on a nice 39,000 dwt open 20/22 Sept. On Handies no fixtures emerged for fronthaul.

East Coast south america

Rates kept increasing on all sizes. A 38,000 dwt modern and shallow was fixed around $18,000/d basis dely dop NCSAm for a trip via N Brazil to USG.

A 61,000 dwt was fixed basis dely Recalada for a trip with grains to MEG/Bangladesh range at $16,500/d + 650,000 gbb.

North Europe

The week started with decent, slow activity and owners indicating $18,000/d dop Cont on Ultramax for trips to S Africa.

Towards mid-week rates started to increase due to tonnage tightening with scrap fixed on Ultramax at $19,000/d dop UK for a trip Via Poland to Med.

An Ultramax open Foyenes was fixed for a trip with steels at $17,500/d to USG.

The Russia market was also very high with a 56,000 dwt fixed with fertilisers to Brazil via St Petersburg around $22,000/d basis dely dop Baltic. Fronthaul trips via Russia was done in the mid $30,000s/d basis Skaw on for trips to India with either fertilisers or coal.

Black Sea 

In Med and BSea the market was still pretty strong mainly due to a sensibly reduced tonnage list, cargo demand was stable.

CrossMed for 35,000 dwt increased to $15/15,500/d basis dely passing Canakkale, Supramax were getting rates in the very high teens. TA routes consequently improved with Handies getting $13/14,000/d to ECSAm and $15,000/d to USG, Supramaxes were fixing $18/19,000/d to USG and $20,000/d to US EC.

The trip to East on Supramax was done at $25,000/d basis dely passing Canakkale, while on Handy around low $20,000s/d.

Indian Ocean

The market remained flat overall in the Indian Ocean with each area performing differently.

MEG/WCI was similar or slightly lower compared to the previous week. A 56,000 dwt open WCI was rumored at $13,500/d for a round trip via MEG, afterwards a 55,000 dwt open WCI was fixed around $11,250/11,500/d level towards the end of week.

On MEG-Bangladesh the aggregates trade was done on a 57,000 dwt open WCI around $15,000/d. Iron ore pellets to China from WCI on an eco Ultrmax was heard to have fixed at $16,500/d basis WCI delivery.The market in ECI range picked up pace and stronger rates were discussed.

Earlier in the week a 55,000 dwt was fixed at $9,000/d dop ECI for a trip to China with iron ore, later a 58,000 dwt open Chittagong was heard to have fixed $10,000/d.

Period rates remained flat in the area with a 56,000 dwt open WCI achieving $13,000/d for 4/6 months period.

Rates remained flat from S Africa and a 56,000 dwt was fixed at $17,000/d+ 170,000 gbb to F East while a 61,000 dwt got $18,500/d + 185,000 gbb.

Far East

Rates increased on all the most representative routes both on Handies and on larger units.

A 63,000 dwt with dely Indonesia was reported at $15,100/d for a trip via Indonesia to S China, a smaller Ultramax with dely Thailand was done at $14,000/d for a similar trip, a 60,000 dwt with dely Japan took $13,000/d for a trip via NoPac to SE Asia and a 61,000 dwt with dely Indonesia was fixed at $17,000/d for the same trip.

A 56,000 dwt with dely S China was done at $14,900/d for a trip via Indonesia to India and a similar vessel with dely N China got $9,000/d l for a trip via Indonesia to WCI.

Crude tanker market

VLCC rates started an upward correction at the very end of the week with 270,000 mt MEG-China assessed at WS37.5 and 260,000 mt W Afr-China at WS44.

The Suezmax market was busier at the end of the week and rates from W Africa picked up to WS77.5 to UKCM, done by Exxon ex Zafiro plus Brass for end of Sept and with a flurry of 1st week October cargoes being worked.

New building orders

After weeks of constant activity, the Newbuilding market takes a break with only few deals reported and also a limited number of options exercised.

Starting from dry we recorded an order for large 42,000 dwt Handysize for delivery in 1st half 2026, no price emerged, but as comparison Namura got recently an order for similar 40,000 dwt around $ 33 mln.

The Tanker sector saw a few order for Product Taners. Tsakos Shipping And Energy ordered 2 x 50,000 dwt MR2 at Yangzijiang following the increasing interest and appetite of this country to take business out of the S Korean market. No price nor delivery were reported so far.Ocean Yield ordered 4 x 74,500 dwt LR1 at GSI for delivery end 2026 and mid 2027 to highlight the very busy schedule of the yard specialised in the tanker sector.

In the large tanker sector Dalian Ship Building got a domestic order for a dual fuel methanol driven VLCC from China Merchant Shipping basis dely Q4 2025.

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Source : capital link